According to the Texas Attorney General’s website, “Mortgage fraud is a criminal offense and primarily involves fraud against mortgage lenders. Generally speaking, it occurs when facts are misrepresented; the value of the house is inflated, or the lender is misled about the buyer’s income, credit history or financial situation.”
Who Commits Mortgage Fraud?
Mortgage fraud can be committed by the real estate agent, the appraiser, the mortgage broker, or even by the buyer themselves. “The result is that too much money is loaned, and the house is not worth what the buyer – and ultimately the lender – paid for it,” according to Ken Paxton, the Attorney General of Texas.
Effects of mortgage fraud include:
- Defrauds financial institutions
- Devastates borrowers
- Devastates borrowers’ families
- Negatively affects the economy
- Affects property values
- Affects financial markets
Like other states, mortgage fraud is a criminal offense in Texas. Under Section 32.32 of the Texas Penal Code, “A person commits an offense if he intentionally or knowingly makes a materially false or misleading statement to obtain property or credit, including a mortgage loan.” An offense under Sec. 32.32 is a misdemeanor or a felony depending on the value of property or amount of credit. Since mortgage fraud is generally a felony, we’re going to discuss the felony penalties.
- If the value or amount of credit is between $2,500 and less than $30,000, it is a state jail felony, punishable by up to two years in prison and by a fine not to exceed $10,000.
- If the value or amount of credit is between $30,000 and less than $150,000, it is a felony of the third degree, punishable by a fine not to exceed $10,000 and by up to 10 years in prison.
- If the value or amount of credit is between $150,000 and less than $300,000, it is a felony of the second degree, punishable by up to 20 years in prison and by a fine not to exceed $10,000.
- If the value or amount of credit is $300,000 or more, it is a felony of the first degree, punishable by up to 99 years in prison and by a fine not to exceed $10,000.
For more information on mortgage fraud, visit the Texas Department of Banking’s website. To fight your charges, contact Dallas Criminal Defense Attorney, Peter Barrett today!