What Are the Penalties for Mortgage Fraud in Texas?

 Posted on June 10, 2024 in Criminal Law

Mortgage fraud is when a person intentionally makes false or deceiving statements to obtain property or a mortgage loan. Any person involved in the process of home buying, from the real estate agent and mortgage broker to the buyer, can commit mortgage fraud, though most cases of mortgage fraud involve a person falsifying or misrepresenting facts to a mortgage lender.

Mortgage fraud is a serious crime in Texas, and it is considered a white-collar crime. If you have been charged with mortgage fraud, you will need the skilled representation of a Texas criminal defense attorney.

Types of Mortgage Fraud

Several different types of mortgage fraud exist, and this crime is often charged alongside crimes like tax fraud or identity theft. Accusations of any of the following schemes or activities can be considered mortgage fraud:

• Using a stolen or false identity on a loan application

• Using someone’s name and credit history on a loan application, and paying them for this information

• The appraiser and borrower of a mortgage work together to inflate the value of a property to the lender

• Misrepresenting assets or income on a loan application

• Failing to disclose items that could disqualify the borrower from obtaining a mortgage loan

Penalties for Mortgage Fraud in Texas

In Texas, Section 32.32 of the Texas Penal Code states that knowingly making a fabricated or misleading statement to obtain credit, including a mortgage loan is a criminal offense.

The severity of this offense and whether it is charged as a misdemeanor or a felony depends on the value of the property or mortgage and the number of parties involved. In general, the more value a mortgage has, the more severe the penalties.

• For mortgages valued between $2,500 and $30,000, penalties include a state jail felony of between 180 days to two years in jail and a fine of up to $10,000.

• For mortgages valued between $30,000 and $150,000, penalties include two to 10 years of prison time and a fine of up to $10,000; this is a third-degree felony.

• For mortgages valued between $150,000 and $300,000, penalties include two to 20 years in prison and a fine of up to $10,000; this is a second-degree felony.

• For mortgages valued at $300,000 or more, penalties include between five and 99 years in prison and a fine of up to $10,000; this is a first-degree felony.

Additionally, accusations of mortgage fraud involving federally insured banks, federal agencies, or the Federal Housing Administration can mean that a mortgage fraud crime is charged in federal court. This is much more severe, and prison sentences may be extensive in addition to fines adding up to hundreds of thousands or millions of dollars.

Contact a San Antonio, TX Criminal Defense Lawyer

The state of Texas takes mortgage fraud seriously, as this crime impacts financial institutions in addition to homeowners. If you are dealing with accusations of mortgage fraud, it is essential to secure the skilled representation of a San Antonio, TX criminal defense attorney.

Attorney Sam Lock has more than a decade of legal experience in the South and Central Texas area, and he provides dedicated and determined guidance for all kinds of mortgage fraud charges. Contact Law Offices of Sam H. Lock at 210-226-0965 for a consultation.