Mortgage fraud is a crime that prohibits certain acts in conjunction with selling a mortgage or obtaining a mortgage. Prosecutors can charge loan applicants, brokers or other third parties depending on the illegal act committed.
Applicants face charges for knowingly making material omissions or false statements on their mortgage application. Prosecutors charge banking professionals and others involved in the real estate transaction for creating false details regarding the property, such as an inflated appraisal.
Mortgage Fraud Task Force
Mortgage fraud is usually a federal crime. Illinois also has a criminal statute prohibiting mortgage fraud. The Illinois legislature created the Mortgage Fraud Task Force (“MFTF”) to pursue allegations of mortgage fraud aggressively. The MFTF can investigate all facets of a real estate transaction, from the initial marketing of the property to the mortgage closing. This unit has the power to impose sanctions on lenders and can levy fines against parties in violation.
Penalties for mortgage fraud
Mortgage fraud is a felony under Illinois and federal law. A person who gets convicted can face up to 30 years in jail. The judge will also impose a fine on the guilty party. Fines can reach as high as $1 million or more. In addition, a person guilty of mortgage fraud can expect to pay restitution to the victimized party.
The state of Illinois is serious about going after mortgage cheats. The MFTF’s report indicates that over 100 persons have been subject to disciplinary action since the unit’s formation. This includes fines collected of over $2 million total.