The Most Common Types of Mortgage Fraud in Houston, Texas

Mortgage fraud is a criminal offense in Houston, Texas. In most cases, you’ll be charged with bank fraud, conspiracy or wire fraud. Under the Fraud Enforcement and Recovery Act (FERA), you can be fined up to $1 million or be placed in jail for up to 30 years for mortgage fraud.

Given the severity of mortgage fraud consequences, it’s good to understand what mortgage fraud is and how you could be charged with the offense. In general, there are two overarching categories that mortgage fraud falls into:

  1. Fraud to gain housing: in these situations, offenders submit falsified information to qualify for a loan so that they can obtain housing with more favorable loan terms.
  2. Fraud designed to help you profit: generally, real estate professionals commit this type of fraud to get more money from a property transaction. These professionals can be mortgage brokers, appraisers or others involved in real estate.

Now that you understand the broad categories of mortgage fraud, let’s look at common types of mortgage fraud that fall under each category.

The Most Common Types of Mortgage Fraud

Mortgages are large ticket items that make it tempting to profit large sums of money off the transactions. Because there is so much money involved in the mortgage industry and so many individuals that are part of the mortgage process, there are many opportunities to commit mortgage fraud. Here’s a look at some of the types of fraud you might encounter in the industry.

  • Forged or altered documentation: As part of the mortgage process, borrowers must submit pay stubs and other documentation to prove their income and financial situation. Forging or falsifying this information in any way is cause for serious consequences.
  • Dishonest property flipping: If you’re in the business of property flipping, be careful to get honest appraisals. When you intentionally get a property appraised at an inflated value to commit fraud, you’ll find yourself in serious trouble.
  • Hiding the borrower’s identity: When you use someone else to obtain a loan because they’ll get more favorable conditions, you commit what’s called “straw buying.”
  • Hidden other mortgages: In some situations, buyers take out a small mortgage to cover the down payment on their larger mortgage. This is not legal because it hides the information from the main lender.
  • Using a stolen identity: Stealing someone’s identity to obtain a mortgage with better terms than you could obtain is illegal.
  • Obtaining an inflated appraisal: When a property owner hires an appraiser who knowingly and willingly inflates the value of a home to meet the number of the highest bidder, this is mortgage fraud.

Hiring a mortgage fraud attorney in Houston, Texas

If you’re being accused of mortgage fraud in Houston, Texas, or the surrounding area, hire a mortgage fraud attorney. An attorney can protect your rights and build a defense against the accusations you’re facing. This is not a matter in which you want to represent yourself in court or accept a public defender.

What to expect from the Law Offices of James Alston

Legal proceedings can be confusing. At the Law Offices of James Alston, we ensure you understand the mortgage fraud charges you’re facing and what each step of the process looks like. When you work with us, you will never be forced into making decisions you don’t want to make.

We’ll help you understand various legal terms and aspects of your defense, such as what a plea bargain is and how your defense team can use it for your benefit. Even when you’re only under investigation and not yet charged with a crime, we can be an asset to you and help you know what to say and what to allow.

Don’t go it alone if you’re facing mortgage fraud charges. Schedule a consultation or call us today at 713-228-1400 to discuss your case and get to know why we’re the right lawyer to defend you.