What Is The Penalty For Mortgage Fraud ?
Mortgage fraud occurs when there has been material misrepresentation by a lending institution or a borrower for procuring the loan. According to the Fraud Enforcement and Recovery Act any kind of misrepresentation of facts is a felony, and the person or the institution is liable for penalty or prison. |
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The punishment can be a maximum period of 30 years in prison. The fine can be to a maximum amount of $1 million. The statute of limitations varies from 5 to 10 years.
There are many types of mortgage fraud like misrepresentation of facts, employment fraud, inflation fraud and occupancy fraud. At the state level, the penalty for mortgage fraud can result in a penalty of prison for 10 years and a fine of $5,000. If the person is involved in multiple frauds, then the fine can extend up to $100,000.
However, the amount of damage is considered for the penalty in a mortgage fraud. If the damage is huge and involves multiple properties, then the penalty will also be huge in terms of monetary value and prison time.
Fraud is declared after a through FBI investigation, and it is usually impossible to prove the investigation false. Mortgage frauds are directly charged and penalized. If it is an individual who has committed the fraud, then they may have to serve in the prison for a minimum of 5 years. Even a minor mistake like proving your intention of staying at the property and not doing accordingly can get you into trouble.
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