Mortgage Fraud
The state of Pennsylvania takes all allegations of fraud very seriously, and lenders or borrowers can face criminal charges if they lie about or omit certain information during the mortgage application process. In certain cases, alleged offenders may also face federal charges for this type of fraud.
The penalties can be quite severe if a person is convicted of this offense, with punishments including several years of imprisonment, substantial fines, and possibly even restitution to victims. Prosecutors will aggressively pursue maximum sentences in these cases.
West Chester Mortgage Fraud Lawyer
If you have been accused of any type of fraud relating to mortgage loans, you will want to make sure that you are working with an
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• Employment Fraud — A borrower misrepresents his or her income by either claiming employment by a non-existent company or a higher position in a real company.
• Equity Skimming — Also known as equity stripping, an investor offers to help a homeowner facing foreclosure by buying the home and leasing it to the homeowner, but the rates and terms of the agreement usually result in default and loss of property and all
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These schemes may involve credit agency employees, mortgage brokers, outside investors, real estate appraisers, real estate brokers, or title insurers working together to either inflate home prices or get loans for non-existent homes.
• Hiding Liabilities — A borrower lies about his or her car loans, credit card balances, or other mortgages in an attempt to improve his or her debt-to-income ratio.
• Income Fraud — A borrower overstate his or her income to qualify for a higher loan.
• Occupancy Fraud — A borrower claims on a loan application that he or she will occupy the property as his or her primary or second residence when it is actually an investment property that should have higher interest rates because of a higher risk for delinquency.
• Property Flipping — Whereas legal flipping involves a party purchasing, improving, and selling a home for profit, property flipping can be illegal when a home is purchased, appraised at a higher value, and sold for profit. This practice may involve a combination of other types of illegal mortgage activity, including appraisal fraud, income fraud, or fraud for profit.
• Straw Buyers — A borrower uses the name and credit history of another party in order to obtain a loan.
Chester County Mortgage Fraud
The United States Attorney’s Office Eastern District of Pennsylvania. Predatory Lending. Retrieved October 31, 2011. http://www.justice.gov/usao/pae/Documents/predatorylending.htm
Bait-and-switch schemes: The lender may promise one type of loan or interest rate but gets the borrower to agree to a different loan and higher interest rate.
The next portion of the chapter talks about how real-estate agents use information to gain power and wealth. Most real-estate agents have a better sense of knowing the condition that a home or apartment is in, and this gives them an upper-hand against the buyer or seller. Like the Ku Klux Klan, real-estate agents use secret words and information to
other over borrowers face is that when they are faced with unforeseeable events and financial
Hanson, J. R. (n.d.). Fraud or confusion? RDH Magazine, 19(4). Retrieved 3 15, 2014, from http://www.rdhmag.com/articles/print/volume-19/issue-4/feature/fraud-or-confusion.html
Example: When the shop owner lends Ma money even though he could lose his job if he was caught. (376)
First, the causes of the foreclosure crisis must be examined. I don’t think that the causes are all that complicated. In the end, the cause is twofold: First, people were buying houses they couldn’t afford, and banks were lending money to these people. Second, banks were engaging in unscrupulous lending practices. They were charging people money that these people neither were expecting to pay nor were able to pay. They were advertising one interest rate and actually putting another in the contract. I’m not sure what the law says about this last bit, but that sounds a lot like ‘fraud’ to me. If my reader disagrees, then I ask him to imagine the following:
Mortgage loans are a substantial form of revenue for the financial industry. Mortgage loans generate billions of dollars in the financial industry. It is no secret that companies have the ability to make a lot of money by offering a variety of mortgage loan products. The problem was not mortgage loans but that mortgage companies were using unethical behavior to get consumer mortgage loans approved. Unfortunately, the Countrywide Financial case was not an isolated case. Many top name mortgage companies have been guilty of unethical behavior. Just as the American housing market was starting to recover from its worst battering since the Great Depression, a new scandal, an epidemic of flawed or fraudulent mortgage documents, threatens to send not just the housing market but the entire economy back into a tailspin (Nation, 2010).
We live in a world that focuses on instant gratification. We compare the bounties and prosperity of others to ours and end up focusing on our ‘have nots’. Focusing on what we don’t have usually only makes us want it more and when we want it bad enough, we will take almost any action that doesn’t seem life threatening or that we think would cause immediate harm. So, many people often find themselves borrowing money to close the gap between what they have and what others have. As a result, many people are
Most people consider this crime to consist of CEO’s manipulating their way to making a large fortune. This of course, is true most of the time in high-profile cases. For example, in late 2001 Enron Corporation executives confessed to overstating the company’s earnings. This lead to artificially inflating what the company was worth and deceived the investors. It took some time to unravel all the fraud put behind this devious act but shows how sophisticated white-collar crime can be. Although it’s usually associated with upper management of corporations, people from all different levels and occupations can perform this crime ("How White-collar Crime Works").
16-9. Sutton is ethically responsible for his own predicaments. This is because he knew what he was getting himself into when he decided to change his type of mortgage plan. Sutton decided cannot later claim that he did not understand the terms and conditions of the agreement. Sutton had the full length duty of reading the agreement. This is because he is the one who stood to gain or lose from the contents of the agreement. Apex Mortgage Services would only be liable if they knowingly led Sutton to signing the agreement knowing that he would pay more than he was paying. What is known as fraudulent misrepresentation. The lender had responsibility to inspect the activities of the broker. This is because the broker is under the lender and the
This is the problem with the burst in the housing market. The third major factor that is causing the mortgage crisis is, mortgage fraud.
Misrepresentation – giving a false statement to the other party with the intentions to benefit or to exploit the other party than the law can end the contract in that case.
A study by Takroni (1980) defines failure to repay as failure to comply with the contractual obligation. While, in the study by Godwin (1999) the indicator of a pending financial problem is late payments. 2.3 Household Income In finance terms, household income is the combined income of all members of a household who jointly apply for credit. Household income is an important risk measurement used by lenders when underwriting loans. Livingstone and Lunt (1992) emphasizes that the disposable income flow is very important as an indicator to the lender whether the borrower is able to make debt repayment installments.
Or maybe it is legally unknown, as for houses "in Florida, another state swamped by foreclosures. Several prosecutors and police agencies there said that unless laws were modified, such behavior would have to be sorted out between borrower and lender in civil court"