Fraud is a generic term for wrongful, criminal deception, the objective of which is financial or personal gain. For some, the term may conjure up images of swindlers intent on tricking others for profit. However, when it comes to mortgage fraud in Iowa, this is not necessarily always the case.
There are two main categories of mortgage fraud: fraud for profit, and fraud for housing. Fraud for profit usually involves a situation where a real estate professional — such as a mortgage broker or appraiser — supposedly attempts to extract money unlawfully with respect to a property or transaction. This often leads to official investigations by law enforcement.
Sometimes, though, homebuyers find themselves the target of a criminal investigation in a fraud for housing scheme, typically involving suspicions of providing inaccurate information. Fraud for housing is usually committed by borrowers who omit or misrepresent important details about things like income or employment, credit and debt, or property value, with the hope of qualifying for a mortgage loan. Sometimes, this may even have been done with the assistance of a loan officer.
Regardless, there are both Iowa state laws and federal laws – such as the Fraud Enforcement Recovery Act of 1979 – that govern mortgage fraud. As such, penalties for mortgage fraud conviction can range anywhere from a class A misdemeanor to something as serious as a class B felony. Sentences for federal mortgage fraud convictions tend to be even more severe than state sentences. However, anyone in Iowa facing such accusations may take comfort in knowing that being accused of mortgage fraud is very different from being convicted in court. An attorney can help those accused understand the charges against them and rigorously challenge any formal allegations, as these cases are often difficult to prove beyond a reasonable doubt in court.
Source: criminal.findlaw.com, “Mortgage Fraud“, Accessed on May 30, 2017