Mortgage fraud might seem like something that only affects shady lenders or large institutions—but in reality, it’s a charge that can impact everyday professionals, business owners, and even first-time homebuyers. If you’re under investigation or have been accused of mortgage fraud in California, it’s important to understand the seriousness of the allegation and the steps you must take to protect your future.
At Simmons Wagner, LLP, we represent clients throughout Southern California facing white-collar crime allegations—including complex mortgage and real estate fraud cases. Here’s what you need to know if you find yourself caught in the crosshairs.
What Is Mortgage Fraud?
Mortgage fraud involves any material misstatement, misrepresentation, or omission related to a real estate loan application that is relied upon by a lender to fund, purchase, or insure a loan. These cases can be charged under both California state law and federal statutes, depending on the nature and scale of the alleged fraud.
There are two main types of mortgage fraud:
- Fraud for housing: When a borrower misrepresents their income, employment, debts, or occupancy status to qualify for a home loan.
- Fraud for profit: Often committed by real estate professionals, this involves manipulating loan applications, property appraisals, or buyer identities to extract illegal financial gain from a transaction.
Who Can Be Accused?
One of the most alarming aspects of mortgage fraud is how broad the net can be. Prosecutors often cast suspicion on:
- Homebuyers and investors
- Loan officers and mortgage brokers
- Real estate agents
- Escrow officers
- Appraisers
- Property flippers and contractors
If your name appears on the loan documents—or if you played any role in the transaction—you could be targeted.
Common Allegations in Mortgage Fraud Cases
Mortgage fraud allegations can arise from:
- Falsifying income or employment on a loan application
- Misrepresenting owner occupancy (claiming a rental as a primary residence)
- Inflated property appraisals
- Kickback schemes involving sellers, buyers, or agents
- Using straw buyers to conceal the true borrower
- Failing to disclose debts or liabilities
What starts as a loan approval strategy or “industry standard” paperwork shortcut can quickly spiral into felony charges—especially if a loan defaults or draws the attention of regulators.
Penalties for Mortgage Fraud
Mortgage fraud can be charged under California Penal Code §532f or under federal statutes like 18 U.S.C. §1341 (mail fraud) or §1344 (bank fraud). Penalties may include:
- Felony charges with prison time of up to 30 years (federal cases)
- Fines of up to $1 million
- Restitution orders
- Loss of professional licenses (for real estate and finance professionals)
- Damage to your personal and professional reputation
Because mortgage fraud is often investigated by federal agencies—including the FBI, HUD, or IRS—cases are typically well-developed before charges are filed.
How to Defend Yourself Against Mortgage Fraud Charges
The best defense strategy depends on your role and the facts of the case. Potential defenses include:
- Lack of intent: Honest mistakes or misunderstandings in paperwork are not criminal.
- You relied on professionals: Borrowers may be misled by agents, brokers, or lenders.
- Insufficient evidence: Prosecutors must prove you knowingly misrepresented material facts.
- Procedural errors: Improper investigations or overreach by federal agents may violate your rights.
At Simmons Wagner, LLP, we conduct a full forensic review of the documents, communications, and financial transactions involved. We work with mortgage experts, investigators, and—when needed—former federal prosecutors to build the strongest possible defense.
Contact Simmons Wagner, LLP Immediately If You’re Under Suspicion
Mortgage fraud investigations often start quietly—with a phone call, subpoena, or audit. Don’t wait for formal charges to be filed. The earlier you involve an experienced defense team, the better your chance of avoiding indictment, negotiating favorable terms, or defeating the charges entirely.
Call Simmons Wagner, LLP at (949) 439-5857 today for a confidential consultation. We’re here to defend your rights, protect your reputation, and help you move forward with confidence.