The Subprime Lending and Mortgage Crisis effectively exposed one thing; mortgage fraud was rampant in the system. Since the end of the Great Recession and Global Financial Crisis, regulators began pursuing more seriously investigations and prosecutions of such crimes. In this article we look at the white collar crimes of mortgage fraud and equity skimming.
Federal Government Endeavors to Reduce Mortgage Fraud Across the Nation
The federal government quickly discovered that mortgage fraud and equity skimming were a national phenomenon. Congress enacted the Secure and Fair Enforcement Mortgage Licensing Act. This created a national system of mortgage registration and licensing protocols.
It also enabled prosecutors to go hard after mortgage fraud. The FBI Director Robert Mueller declared that the number of cases of mortgage fraud rose by almost 63 percent between years 2008 and July 2009. To go more effectively after these “white collar” criminals, Treasury Secretary Tim Geithner announced his Treasury Department would begin collaborating more intensively with the Federal Trade Commission, Department of Justice, Financial Crimes Enforcement Network, and Housing and Urban Development in order to effectively tackle mortgage fraud around the country.
The feds believed that such a multi-organizational approach to hunting down mortgage fraudsters would permit the federal government to successfully boost its enforcement, all the while raising consumer awareness of fraudulent and abusive schemes in existence.
Possible Penalties for Committing Mortgage Fraud
The government enacted severe penalties for such criminal behavior of mortgage fraud. The penalties can include large fines, seizure of business licenses, misdemeanor charges, and even criminal felony charges. With state and federal agencies working together to uncover and prosecute such criminals, the chances of people becoming caught has substantially increased.
The downside to this higher level of inter-agency communication lies in the higher odds for false accusations to arise. Attorneys with great experience in defending against such accusations of mortgage fraud come in handy for any business which feels that it is being improperly targeted for deceptive lending or fraudulent practices.