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Federal Criminal Defense Attorney
John D. Kirby in San Diego, CA

Mortgage fraud is a type of white collar crime that targets mortgage lenders and other financial institutions. Despite improvements in technology designed to combat the traditional methods of mortgage fraud, fraudsters learn quickly and are coming up with new ways to get around the improvements that the mortgage industry makes. Mortgage fraud is defined by the FBI as “some type of material misstatement, misrepresentation, or omission in relation to a mortgage loan which is then relied upon by a lender.” 

If you find yourself involved in a case of mortgage fraud, the experienced team of lawyers at the offices of John Kirby Law can help. Here are some of the most common cases that our mortgage fraud lawyers deal with. 

 

  • Occupancy Fraud

 

This type of mortgage fraud occurs when borrowers misrepresent how the purchase property will be occupied. Because underwriting rules differ for how properties will be occupied – primary residence, second home, investment property – buyers will sometimes lie in order to pay lower mortgage payments. One of the most common types of occupancy fraud is known as reverse occupancy fraud, where the buyers state that they will use the purchase property as an investment property but use the rental income to qualify for the mortgage. At the same time, the buyer ends up living in the house as their primary residence. 

 

  • Income Fraud

 

Income fraud is a type of mortgage fraud that occurs when a borrower misrepresents the availability, continuance, amount, or source of income used to qualify for a mortgage. There are two main types of income mortgage fraud:

False Stated Income: This type of fraud typically occurs when income information added to Form 65 isn’t fully verified. In this case, the borrower may not even be aware that they misrepresented their income. 

Misrepresentation of Employment: Especially prevalent in California, this scheme involves mortgage borrowers providing false employment documents and pay stubs from nonexistent employers. 

 

  • Transaction Fraud

 

Transaction fraud occurs when the nature of a transaction is misrepresented. In this case, a buyer and seller have undisclosed agreements or a down payment is falsified. A couple of different types of transaction fraud are straw buyers and non-arm’s length transactions. Straw buyers are people who specifically act on behalf of the true purchaser. Once the transaction is completed by the straw buyer, the property title is transferred to the real buyer. This type of fraud happens because the real buyer might have bad credit or be trying to hide other situations which would disqualify them from obtaining a mortgage. 

 

  • San Diego, CA Mortgage Lawyers

 

If you have found yourself involved in a mortgage fraud case, it’s advisable to turn to a reputable and experienced mortgage lawyer. The Law Offices of John D. Kirby were established in 2007, after John Kirby spent 10 years at the United States Attorney’s Office. Since then, he has become nationally recognized, appearing on ABC News, CBS, NPR, and Good Morning America, and he has received a 5 star rating on Avvo’s legal service marketplace. 

To learn more about the services of John D. Kirby, contact us at (619) 349-1728.