Many mortgage brokers and related professionals often begin their careers hoping to help people. They love the idea of helping first-time homeowners purchase a property or new parents move into a bigger house. Their job involves helping those hoping to purchase real property navigate the process of securing financing.
Many mortgage brokers would never dream of engaging in a mortgage fraud for profit scheme. Mortgage fraud for profit often involves fabricating a property or lying about its condition to secure financing with the intent of defrauding the mortgage lender. However, a substantial portion of mortgage fraud does not involve the intent to steal from a mortgage lender but rather a desire to acquire housing.
Many well-intentioned mortgage professionals could find themselves facing accusations of involvement in mortgage fraud for housing schemes.
How professionals put themselves at risk
Mortgage brokers help their clients fill out the paperwork. They connect aspiring homeowners to mortgage programs that fit their needs, including specialized government loan programs and different types of loans offered by private lenders. They help clients document their income and assets to prove that they qualify for a mortgage.
Generally, their role is to educate their clients and assist them with the red tape that comes with acquiring a mortgage. Some professionals cross the line and may go too far in their desire to help their clients. Instead of giving neutral advice, they may instruct aspiring buyers to fill out paperwork inaccurately. They might go so far as to help clients falsify financial records or artificially inflate their income.
The goal is simply to get a client into a home when they might otherwise fall just short of qualifying for a mortgage. However, if the misrepresentation of their finances comes to light later, the mortgage professional involved could be as vulnerable to prosecution as the individuals seeking the mortgage. Especially in scenarios where buyers eventually default on their mortgages, everyone involved in misrepresenting the borrower’s financial circumstances could be at risk of mortgage fraud charges.
A professional accused of fraud often has to worry about not just criminal penalties but also about becoming ineligible for professional licensing in the future. Fighting back against mortgage fraud allegations often requires the support of a professional familiar with the law. Those facing white-collar criminal charges may need to discuss the allegations they face to develop a strategy that can protect their freedom and their professional future.