Miami Mortgage Fraud Defense
The Real Estate Bubble
During 2005, 2006, 2007 and 2008 many people applied for mortgages that they couldn’t afford. Some people applied for mortgages claiming that the mortgage was for a primary residence when, in fact, it was for investment purposes. In the past, banks and mortgage companies did not care because once they wrote the loan, they made all their money up front through service fees and commissions. The loan was then sold to Wall Street which packaged the loan into a security and sold the security like stock in a company to banks, investment funds and to the public. We all know that when the real estate bubble burst, many of these real estate or mortgage securities became worthless, leading to the huge economic losses requiring massive Federal government bailouts. Many established Wall Street firms like Bear Stearns and Merrill Lynch and big banks like Washington Mutual or Wachovia either went bankrupt or merged with other, bigger firms to stay alive. This was all a consequence of the mortgage fraud which led to the sub prime mortgage crisis.
Only now are the Federal and State Authorities beginning to take a hard look at many of those loan applications which led to loans ending up in default. This type of fraud occurred in great abundance in South Florida where the authorities continue to focus their investigations.
The mortgage brokers facilitated many of these mortgages through “stated income” applications where proof of actual income was not required by the lender — meaning that the bank did not ask for IRS returns to back-up an individual’s claim of income. Many mortgage brokers actually encouraged mortgage applicants to submit exaggerated claims of income which were not true and told the applicants there was nothing to worry about because the loan-to-property-value -ratio was within acceptable limits. Many bank employees even assisted bank clients to submit false claims about income. In some cases the mortgage brokers or bank employees provided the added service of assisting the mortgage applicant by providing made-up or false W-2 statements or even false or made-up pay stubs to back-up the false and fraudulent statement of income. They told the mortgage applicant what to fill-in on the mortgage loan application including lying about down payments which were never made and they told the mortgage applicants that there would be no problem. They were wrong, and the mere fact that a mortgage or bank employee provided these false or fraudulent documents to support the loan does not provide a basis for you, the loan applicant, to get off the hook.
Sam Rabin and his associates are experienced in defending sophisticated mortgage fraud cases. Defenses may include lack of intent or lack of knowledge. In many cases, innocent people were manipulated by unscrupulous real estate agents, real estate brokers or mortgage brokers who were just looking for a commission on the loan.
In some instances, however, the evidence of guilt may be overwhelming. In cases where a successful defense cannot be mounted, we will explore the possibility of our client becoming a witness and not a defendant. You will need an experienced law firm with the know-how and negotiating skills to make this happen.
Having valuable information that can incriminate a senior banking, mortgage or real estate official is something you may use to your advantage should it become necessary. The authorities will need the help of some loan applicants to cooperate in order to track down those mortgage, bank and real estate employees who engaged in unscrupulous and unlawful practices. Testimony by a mortgage applicant which incriminates a target of a criminal investigation may be considered as substantial assistance to the authorities which could result in a considerable reduction in one’s criminal liability and may, depending on the circumstances, provide a basis for the attorney to have all charges dropped against the applicant in exchange for that person’s testimony against the bank, mortgage or real estate employee or agent who engaged in those unlawful practices.
Federal and State authorities are just now beginning to comb the records of loans granted from 2005 forward looking for evidence of fraud. Coming forward before the authorities get to you could definitely be in your favor if handled properly by an experienced criminal lawyer.
If you participated in a mortgage fraud scheme, no matter how small your participation, you should have your conduct reviewed by Sam Rabin who is experienced in these matters. Our firm offers free and fully confidential consultations which will assist you in determining what your next move should be and whether or not you are at risk for prosecution for mortgage, bank or real estate fraud and what defenses can be mounted on your behalf.
Don’t wait until it is too late to act. Once the authorities are on to your case you will not be in the same position as one who voluntarily comes forward on his or her own. It is generally the practice of Federal and State Authorities to treat people who come forward on their own much differently and more leniently than someone who comes forward after their trail of fraud and deceit has been discovered. Learn about the Statute of Limitations »
