Best Defense for Mortgage Fraud
California Penal Code 532f defines the white-collar crime of mortgage fraud, which is frequently called real estate fraud. This law applies to all types of mortgage transactions involving the lender, borrower, and other people. PC 532f deals not just with residential mortgage loan transactions but also with commercial real estate and different types of credit.
A mortgage fraud offense occurs when someone commits a fraudulent act connected to purchasing, selling, renting, or financing real estate property.
This includes unlawful conduct related to housing, mortgages, foreclosures, and even rental agreements, as well as provisions in the statute that list punishments for those who intentionally give false information in a real estate transaction.
A mortgage fraud conviction carries severe penalties and requires the victim to pay restitution. The most common forms of mortgage and real estate fraud include the following:
- fraud related to property foreclosure,
- filing forged or fake mortgage documents,
- skimming property rent,
- unlawful property flipping and straw buyer schemes,
- predatory lending,
For more detailed information, our Los Angeles criminal defense attorneys explain the laws below to help you with your situation.
What is the Definition of Mortgage Fraud?
California Penal Code § 532f PC has provisions that say you could be charged with the crime of mortgage fraud if, with the intent to defraud, you commit any of the following acts:
- intentionally make misleading or false statements during the mortgage lending process;
- deliberately omit relevant information during the real estate lending process that the mortgage lender used;
- file documents with information you knew were not true;
- receive funding due to information you knew was false;
- participating in unlawful foreclosure rescue scheme;
- getting mortgage loans with fake identification;
- giving mortgage lenders fraudulent documents.
Other types of relevant actions and deliberate omissions can also result in the filing of a mortgage fraud case.
There are situations, however, where someone could face mortgage fraud charges when they didn't intend to commit an illegal act.
For example, perhaps they made an unintentional error on a mortgage loan application or a simple misunderstanding.
California Crimes Related to Mortgage Fraud
Several offenses are relevant to real estate fraud and are commonly nosed by prosecutors.
California Penal Code 487 PC grand theft is a famous statute prosecutors use to charge someone for mortgage fraud, which is usually related to theft by pretenses when someone defrauds another with false representations or promises.
Put simply, mortgage fraud could occur under PC 487 when somebody gives false statements to a buyer or seller to mislead them, such as the concealment of property defects.
California Penal Code 115 PC filing forged documents deals with the forgery and falsification of mortgage documents.
This statute makes it a crime to file a forged deed with the county recorder to deceive the government related to the ownership of mortgage property. This law applies to:
- forgery of mortgage loan contracts,
- real estate sale contracts,
- disclosure forms directly related to property defects.
Civil Code 2945.4 Foreclosure fraud occurs when someone fraudulently claims to help homeowners with foreclosure but charges excessive fees and defrauds owners desperate for help.
Civil Code 890 rent skimming is a form of mortgage fraud when someone deliberately fails to apply actual rent payments received with the intent to defraud.
What are the Penalties for Mortgage Fraud?
If convicted, the penalties for mortgage fraud typically fall under the umbrella of grand theft penalties.
Mortgage fraud is a “wobbler” that can be charged as either a misdemeanor or felony offense. A misdemeanor conviction carries:
- up to one year in county jail,
- a maximum fine of $1,000,
- summary probation,
- restitution.
A felony mortgage fraud conviction carries:
- up to three years in California state prison,
- a maximum fine of $10,000,
- probation and restitution.
Filing forged documents under PC 115 is a felony offense that carries a sentencing of up to three years in jail and a fine of $10,000.
Foreclosure fraud under Civil Code 2945.4 carries the same penalties as grand theft listed above.
How Can I Avoid Jail Time?
I've been handling mortgage fraud criminal cases in Los Angeles for many years now, and usually, one of the best defense approaches is to see if it's possible to “make whole” whoever lost the money. This is called “restitution.”
If money is lost, the government and prosecutors want to ensure they do their job and get the money back for the victim. If we can help get that money back, we're going to look good, we're going to be treated fairly, and we will have a good chance to stay out of jail.
If the victim goes unpaid, that's when the prosecutors start to get mad and want to penalize whoever it is that caused that victim not to get their money back.
So, one of the best strategies is to figure out a way to get the money back to the victim, make the victim whole, and put the victim in the best possible position.
Defending Mortgage Fraud Cases
The restitution discussed above assumes, of course, that the prosecutors have the proof to convict the individual who is charged with mortgage fraud in California.
If there are problems with proof, your best strategy is to defend the case. The intent to defraud is the primary element of the crime in all mortgage fraud cases.
Put simply, a prosecutor has the burden to prove you specifically intended to defraud someone related to a mortgage fraud transaction. This provides a key defense strategy, as we could argue that an honest mistake occurred that did not rise to the level of a deliberate act to defraud.
We could argue that an honest mistake occurred that did not rise to the level of a deliberate act to defraud.
Further, negotiation with the prosecutor to reduce or dismiss the charges might be an option, depending on the circumstances.
We may avoid formally filing criminal charges before the court through prefiling intervention.
Strategy Meeting
What I have you do is come in and meet with me. We sit down and go over everything. We talk about the problems with the prosecution's case and what we must do to properly prepare the case for trial. This step-by-step approach ensures that we are fully prepared for the legal process.
That's a step-by-step approach. First, we have to look at what the prosecutors will use as evidence to show that the client is guilty of the crime. A lot of time, I will talk to the prosecutors and say my client is saying that they are innocent.
Can you please explain what evidence you have that shows they are guilty? Then I take my pen and my pad, and I remain quiet. A lot of times, they will give me their entire argument.
Sometimes, their argument needs to be revised. Sometimes, they need to have all of the details. Unfortunately, in these California mortgage fraud cases, the investigators will often do a one-sided investigation.
So, what ends up happening is they're only getting half the story. They're only in a position where they have part of the information, and sometimes that puts the prosecutors at a considerable disadvantage, and they don't even know it.
They don't start to find out until the case is being litigated and the defense attorney, somebody like me, who's got almost three decades of courtroom experience:
- starts to take apart their case;
- starts to attack their witnesses;
- starts to present evidence that they didn't know about.
That's why it's so important that when you sit down with somebody like me, the criminal defense attorney you're considering hiring, give me the correct information so I can adequately defend you with the right information.
I can be ready for the prosecutor's attack. I can often come up with attacks of my own that can be very damaging to the prosecutor's case.
Sometimes they have one good witness, and you give the information, and I use that information to destroy that witness's credibility. Now, their case becomes extremely flawed. Now they have a problem.
Criminal Defense for Mortgage Fraud Charges
So, the best strategy first is to decide if we are going to fight it or try to resolve it. If we're going to try to resolve it, we're going to get character letters. We will get all of the information that the prosecutors might not have to show that there's more than meets the eye here.
We will try to bring up mitigating circumstances to help keep you out of jail, preserve your reputation, and set you up to be able to salvage your record in the future.
So, if you or a loved one is charged with mortgage fraud anywhere in California, you've come to the right place. Pick up the phone. Ask for a meeting with Ron Hedding. We will go over the strategy depending on your circumstances. We will talk about whether or not this is a case that you can fight.
We will talk about whether this is a case that should be negotiated. I'm going to be straightforward with you. I'm going to listen to what you have to say, and then we'll talk about the potential solutions for you to get you out of the criminal justice system as fast as possible.
