In the mortgage and lending industry, the paperwork is intensive and the regulations complex. It is easy to run afoul of the law if any documentation is deemed false, misleading, or incomplete. Government and industry fraud investigators often draw the wrong conclusions when examining records, pressing criminal charges when there was no intent to defraud.
The Law Office of Mark L. Horwitz, a Professional Association, provides a swift, vigorous defense to borrowers, lenders, or their go-betweens. By intervening early at the audit stage, our number one goal is to prevent indictments. In the event charges are brought, we use every resource to keep our clients from going to prison. Our experienced criminal defense lawyers can capably challenge the government's case at trial or negotiate with prosecutors to minimize the penalties.
Dedicated To Protecting Your Interests
Our attorneys have succeeded in pre-empting criminal charges, avoiding the severe penalties of a conviction. We work with internal banking auditors or state and federal banking regulators to convince them that it was administrative oversight or an innocent mistake, and not intent to commit fraud for profit. For instance, when the markets are good, banks may make loans without completing due diligence, cutting corners to help buyers qualify or get better rates. Discrepancies in the paperwork only surface later if the mortgage goes into default, and regulators backtrack to scrutinize the loan. We work to show that documents, if not correct, were not the product of fraudulent intent.
Construction Loan Fraud
Due in part to the subprime mortgage scandal, state and federal law enforcement authorities have been giving greater scrutiny to construction loans and real estate development projects, looking for fraudulent activity. Typically, construction loans are secured through reported assets, proof of lease or rental agreements, and buyer contracts. If the information provided on a construction loan application is incorrect, allegations of fraud may result when investigators believe the application was purposely falsified. At the Law Offices of Mark L. Horwitz, our attorneys work closely with forensic accountants, investigators, and underwriters to convince investigators of our client's innocence. In many instances, our early involvement can prevent further investigation by convincing authorities that false information was not purposely provided.
Under Investigation for Construction Loan Fraud
Our law firm represents and counsels the following clients facing construction loan fraud charges:
- Construction companies
- Contractors / subcontractors
- Loan officers
- Bank executives
- Mortgage brokers
- Individual builders
Avoiding Obstruction of Justice Charges In Construction Loan Cases
Too often, people who aren't guilty of committing the crime they are being investigated for attempt to cover up information they believe will incriminate them. When investigators discover information that conflicts with what they've been told by a suspect, they may intensify their investigation in the belief a suspect is hiding information. The end result may be a charge of obstructing justice, leading to further legal complications and ill will between you and prosecutors.
At the Law Offices of Mark L. Horwitz, our lawyers work closely with clients in order to ensure they avoid an obstruction of justice charge. While our attorneys act to ensure our clients don't incriminate themselves, we also take steps to ensure pertinent records and information is preserved. Destroying company records, bank statements, work contracts, or relocating a key witness could result in obstruction charges if such actions come to the attention of the prosecution.
Before the bottom fell out of the subprime mortgage market, real estate investors purchased homes, upgraded them, and sold them later at a profit. In order to purchase a home, however, accurate, thorough financial information must be provided on a mortgage loan application. When the real estate market began to falter, real estate investors who had depended on the rapid turnover of purchased homes, found themselves over-extended financially. Referred to as "house flipping," when home sales slowed to a crawl, investors could not sell a home fast enough to clear its outstanding debt from their financial record. As a result, some failed to accurately report multiple mortgages for which they were responsible.
Straw Purchasers and House Flipping Allegations
In order to increase the amount of property sold, some real estate investors use a "straw purchaser" to apply for a mortgage loan. Once the loan is approved and the house bought, the property is sold for a profit. The real estate investor typically divides a portion of the profit with the straw purchaser as compensation for his or her services. Using a straw purchaser, however, constitutes fraud if it leads to falsified mortgage documents. However, the burden of proof rests on prosecutors: they must demonstrate the intent on the part of both involved to purposely commit fraud.
Our attorneys tell our client's side of the story, making sure prosecutors and jurors understand the circumstances and events surrounding our client's case. In some cases, it may be possible to convince prosecutors to dismiss or reduce the charges against our client when facts are brought forth regarding the relationship between an investor and a purchaser.
Loan Application Fraud
There are many ways for homebuyers to land in trouble with federal authorities while applying for a mortgage. Criminal intent may be assigned to honest mistakes in a mountain of required documentation, or charges could result from the lax practices of mortgage professionals trying to help buyers qualify for loans.
Borrowers are often accused of buyer fraud when all they did was trust the advice of an unscrupulous professional. Some brokers, for instance, will tell homebuyers how to fill out the mortgage application so as to increase their chances of approval. Or, an appraiser may inflate the value of a property, which ultimately harms the lender and the borrower.
Investigators may discover overstated income, false employment claims and other false entries which can cause a criminal investigation. The borrower may not be at fault if a real estate professional filled out the information incorrectly. It is not uncommon for loan applications to be signed by the borrower without them properly reading the application.
We have also represented buyers accused of mortgage fraud on grounds, including cases of falsified documents, fake identity, false statements about who is providing the down payment, or claiming a home will be a primary residence when it is a second home or investment property.
Our attorneys are skilled at defending buyers on fraud-related charges such as conspiracy, which investigators may suspect in cases of straw purchases or the purchase of multiple properties using the same real estate agent and appraisers.
Responding to Investigators
We make every attempt to engage government officials before charges are brought and to persuade them that no fraud was committed, or that our client was not complicit in any deception. Early involvement by a lawyer may help prevent criminal charges from being filed and convince prosecutors to drop the investigation.
If charges are brought, even first offender homebuyers can face jail and other serious penalties upon conviction. Early representation protects the client's rights and allows us to vigorously defend the client in court.
Mortgage Broker Fraud
Your company wants to make loans and your commission is based on getting loans through the process. These goals may have impacted the way you counseled loan applicants on how to complete loan application paperwork.
As a mortgage broker, you are particularly vulnerable to investigations of loan practices and charges of mortgage lending fraud and conspiracy. If a loan applicant used incorrect information, if you revised the form, or if you had the borrower sign a form before all the information was completed, you may face criminal bank fraud charges.
If you relied on what the purchaser said, and then the purchaser finds themselves under investigation for loan application fraud, they may try to shift the blame to you. As an industry insider, you may become the target of a criminal investigation.
If you are found guilty of having falsified documents or advised a client to falsify documents used in obtaining a loan, you can face incarceration if convicted.
Protecting Our Clients In Mortgage Broker Fraud Cases
To obtain a conviction for fraud, authorities must prove criminal intent beyond a reasonable doubt. In our experience, investigators often wrongly attribute intent to common industry practices in the mortgage lending business or may find criminal intent based upon false allegations made against the broker.
We review financial documents and work to convince investigators that intentions were good even if the paperwork contains irregularities or brings to light sloppy loan procedures. There may also be compelling business reasons as to why a borrower has been asked to sign a document prior to the complete gathering of information. Often, conduct that is perceived as fraudulent has legal explanations.
Mortgage Lending Fraud
Increasingly, state and federal officials are targeting the banking industry in investigations involving allegations of mortgage fraud. During the subprime mortgage market boom, questionable underwriting tactics and loan approval practices resulted in people being qualified for loans they could not afford. Now, state and federal investigators are looking at the loan application and underwriting process used by mortgage companies and banks. At the Law Offices of Mark L. Horwitz, our attorneys work with CPAs, forensic accountants, and our own investigators in gathering evidence to undermine the prosecution's case against our client. We have the resources needed to defend underwriting decisions and put the prosecution on the defensive.
Our attorneys counsel and defend clients in cases involving the following allegations:
- Underwriting irregularities
- Over-reporting income or assets
- Inflated or questionable appraisals of property
- Failure to accurately indicate primary and secondary residence
- Falsifying loan application information
Who is Responsible for False Information on Loan Applications?
Investigators aren't always as diligent as they should be in determining who is ultimately responsible for submitting false information on a mortgage loan application. If a borrower purposely misreports assets or income, an investigation should be re-directed towards the person or parties responsible for committing fraud. Our lawyers work with respected investigators and forensic accountants to gather information on borrowers. Through our investigation, we can question borrowers and other witnesses to expose the source of fraud and falsified loan applications.
Industry Insider Cases
Because of their fiduciary roles, industry insiders can face enhanced criminal penalties if found guilty of profiting from fraudulent transactions through kickbacks, fees, or commissions.
If you have been approached by bank auditors, or state or federal investigators, it is important that you contact a skilled criminal defense attorney. Early representation is important to avoid statements that, if misunderstood, could lead to criminal charges. Early representation can also prevent actions which may be considered an obstruction of justice.
Our criminal defense attorneys represent individuals and companies in the mortgage and banking industry suspected of using their positions to commit mortgage lending fraud or construction loan fraud. We stand willing to represent:
- Bank directors, loan officers, and mortgage brokers accused of falsifying records or green-lighting fraudulent loan applications, often suspected if fees are unusually high
- Appraisers accused of appraisal fraud (collusion with sellers to inflate market prices and "flip" properties)
- Real estate brokers / real estate agents accused of participating in bank fraud and mortgage fraud
- Builders and developers accused of misrepresentation and fraud
To obtain a conviction for fraud, authorities must prove criminal intent beyond a reasonable doubt. Our experience has shown that investigators at times wrongly attribute intent to common industry practices in the mortgage lending or commercial lending business. For example, relying exclusively on a certain appraiser may be a "red flag" for appraisal fraud, but the bank or real estate broker may simply have a long and trusted relationship with that appraiser.
Law Enforcement Investigations
Inquiries into questionable loans can quickly turn into criminal investigations for mortgage fraud, banking fraud or conspiracy. Early intervention by an attorney with experience handling mortgage fraud cases can mean the difference between walking away or facing criminal fraud or conspiracy charges.
Typically, an internal review is triggered when a homeowner defaults on a mortgage loan or a bank discovers several mortgages in default involving the same industry insiders or purchasers. If the audit reveals irregularities in loan applications or supporting documents, the case is referred to the FBI or Florida law enforcement.
The Federal Deposit Insurance Corporation (FDIC), the federal department of Housing and Urban Development (HUD), and other state and federal regulatory agencies may also get involved in investigations that turn into a criminal investigation. Signs of a criminal investigation include:
- The FBI or other criminal investigators start conducting interviews
- The bank sends out an auditor who raises questions about the truthfulness of documents
- The FBI or other law enforcement attempts to interview you
Many times law enforcement agents will show up without an appointment for an interview. In this way, they hope that you will not have a lawyer present when they talk with you.
Mortgage and commercial lending are complicated matters. Law enforcement officers are investigating business professionals but often do not understand the industry, its practices, jargon, and operations. There is a huge opportunity for miscommunication and erroneous conclusions.
Our attorneys strive to demonstrate to the investigators' satisfaction that no fraud occurred, or that there was a lack of criminal intent. We carefully counsel clients on how to respond to auditors or investigators to avoid charges of obstruction of justice, for false statements or destruction of evidence.
Contact Our Law Firm
When you schedule a consultation at our Orlando law firm, one of our attorneys will meet with you one-on-one to discuss your case and develop an effective defense strategy.
If you have been accused of fraud, don't face the charges alone. Contact the Law Offices of Mark L. Horwitz, P.A., online or call 407-401-7224.