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How Can I Defend Against Mortgage Fraud Allegations During a Divorce?

Categories: Criminal Law & Process

Mortgage Fraud Allegations

At the time of divorce filings, many couples own real estate property jointly and have gone through a mortgage application process together.  Mortgage applications typically conclude with a statement that all information provided is accurate and true under penalties of perjury.  By signing the mortgage application, each spouse swears that the information contained therein is correct and accepts civil and criminal liability for any information that is not true.

In some cases, when the partnership between husband and wife breaks apart, one spouse will claim that the information contained in the mortgage application is not fully accurate.  The spouse may claim that his/her signature was forged by the other in order to escape financial liability for the mortgage debt.  The spouse may also report, or threaten to report, inaccuracies on the document to authorities in order to accuse the other spouse of mortgage fraud for the purpose of obtaining an advantageous child custody arrangement or a favorable financial settlement.

What exactly is mortgage fraud?  Mortgage fraud refers to the act of making material misstatements or omissions on loan documents.  18 U.S.C. § 1014.   In other words, mortgage fraud involves obtaining a mortgage from a financial institution under false pretenses.  The penalties for mortgage fraud include up to ten years in federal prison and fines of up to $10 millionAllegations of mortgage fraud are investigated by the Federal Bureau of Investigation in coordination with the local United States Attorney’s Office.

Common examples of mortgage fraud include:

  • Submitting false or fraudulent supporting documentation with mortgage applications (i.e. fake paycheck stubs);
  • Using “straw buyers” to purchase property in order to hide the identity of the true buyer;
  • Applying for mortgage loans using a stolen identity;
  • Inflating the appraisal value of a home in order to receive a larger mortgage loan; and
  • Taking out a second mortgage on a home to cover the down payment on the first mortgage without informing the first mortgage holder of the second loan.

What makes mortgage fraud particularly dangerous is the fact that it is often charged in connection with bank and wire fraud.  The moment someone submits a fraudulent mortgage application, the US Attorney’s Office has the option to also charge that individual with bank fraud or wire fraud – two additional federal felonies.

It is important to understand that mortgage fraud is not just a federal offense, it also constitutes a felony.  You should never take federal felony allegations lightly.  Notably, mortgage fraud is also a state offense in many states, including Florida, California, and New York.   In the experience of the former state and federal prosecutors at Oberheiden & McMurrey, LLP, the sooner someone accused of mortgage fraud obtains a criminal defense attorney, the more likely that person will be able to avoid criminal charges as the result of the accusation.  Therefore, we strongly encourage spouses who are accused of mortgage fraud before, during or after a divorce to immediately consult with experienced criminal defense attorneys instead of leaving the criminal accusations to be handled by their family lawyers.  Too much is on the line.  If you are a medical professional, for example, a careless defense of a mortgage fraud charge could jeopardize your medical license, your practice, and ultimately your livelihood because pleading to or being found guilty of a felony will likely force you to forfeit your professional license and may cause other restrictions on your personal and professional life.

Experienced Attorneys Defending You Against Mortgage Fraud Allegations

The attorneys at Oberheiden & McMurrey, LLP can assess your case and help you determine an appropriate defense strategy.  If the accusations of wire fraud are merely a vindictive attempt by your spouse to gain leverage in your divorce proceedings, we can help you take measures that will prevent or reduce any investigative interest into your case.  Our lawyers can communicate with the authorities on your behalf and allow you to safely cooperate with the investigators without incriminating yourself or damaging your case.  Conversely, if we determine that the accusations of wire fraud may have merit, we can help you build a defensive strategy that will result in the most advantageous outcome under the circumstances.  Our number one objective is always to avoid criminal charges for our clients.

  • Nick Oberheiden has successfully defended physicians, lawyers, and business owners in countless federal criminal proceedings, many of which he was able to resolve without any charges. Dr. Oberheiden routinely appears on behalf of his clients before the Department of Justice, the IRS, the FBI, the DEA, and other law enforcement agencies. He is trained in negotiations by Harvard Law School, and he received his Juris Doctor from UCLA School of Law as well as a PhD in law.
  • Lynette S. Byrd focuses her practice on civil and criminal litigation, Medicare and insurance audits, and general advice and counseling in health care law. She is a former Assistant United States Attorney with years of substantial trial experience under her belt who merges excellent litigation skills with profound understanding of the law.

Free Consultation

The attorneys of Oberheiden & McMurrey, LLP have the experience and knowledge necessary to evaluate and assess whether a mortgage fraud allegation has merit or whether it is just a blank threat in the context of a contested divorce.  If you are accused of mortgage fraud during a divorce, please call the attorneys of Oberheiden & McMurrey, LLP today to discuss effective defense strategies that can defeat the allegations against you before they become a case.

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