Purchasing a home can understandably be an exciting process for all parties involved, but fraudulent activity can quickly cast a dark cloud over this process. Specifically, mortgage fraud may occur, leading to real estate litigation. Those who are negatively impacted by mortgage fraud in Los Angeles, such as mortgage lenders and brokers, have the right to pursue justice through the civil court system.
Mortgage fraud refers to a variety of illegal schemes that involve misstatement or misrepresentation on mortgage documents. For instance, a home buyer or a mortgage broker might submit false W-2 forms. In addition, a real estate professional might obtain a property appraisal that is inflated.
Two chief types of mortgage fraud exist. One is called fraud for profit, where a real estate appraiser or a mortgage broker, for example, engage in fraudulent activity to extract funds from a transaction or property. The other type is called fraud for housing, which is where a home borrower provides inaccurate, false or incomplete information to qualify for a home loan or to enjoy more personally favorable terms when purchasing a house.
Those involved in mortgage fraud may be charged and end up being convicted in the criminal justice system. However, they might also be held financially responsible for the monetary damages that lenders incur as a result of the fraud. A civil claim filed with the help of an attorney in Los Angeles who focuses on real estate litigation might be based on deceit and/or misrepresentation, contractual theories, a breach of trust or conspiring to defraud a lender. Appraisers and mortgage brokers are third parties who may also be liable for monetary damages in a civil mortgage fraud lawsuit.
Source: findlaw.com, "Mortgage Fraud", Accessed on May 15, 2017