Lebedin Kofman LLP

What are the Common Defenses Used by Mortgage Fraud Lawyers in New York?

Facing charges of mortgage fraud in New York can be a daunting experience. Mortgage fraud cases can arise from various activities, including falsification of financial information, misrepresentation of property values, or manipulation during the application process. If you find yourself accused of such crimes, you will need a New York mortgage fraud lawyer to build a solid defense on your behalf. But what defenses are commonly used in these cases? Below, we’ll explore some of the most effective strategies employed by lawyers in responding to mortgage fraud allegations.

1. Lack of Intent
One of the primary defenses a New York mortgage fraud lawyer may employ is the argument that the accused had no intent to commit fraud. Oftentimes, the prosecution needs to prove that there was deliberate or intentional deception in the mortgage process. Small clerical errors or unintentional misrepresentations in mortgage applications can sometimes be mistaken for fraud.

For example, filling out a financial form incorrectly due to confusion around complex legal terms could lead to accusations of mortgage fraud. However, if there’s no evidence of intent to deceive, your lawyer might argue that the misstatements were a mere mistake, not a crime. Demonstrating the absence of intent can significantly reduce or dismiss the charges.

2. Lack of Knowledge
Another defense that may be used by a New York mortgage fraud lawyer is lack of knowledge regarding the fraudulent activity. Mortgage fraud schemes often implicate several parties, from lenders and borrowers to brokers and agents, and not everyone involved may be fully aware of fraudulent activity taking place.

Your defense could focus on proving that you were not aware or had no reason to suspect that fraud was occurring. For example, if you’re a borrower accused of submitting false documents, your lawyer might argue that you relied on your mortgage broker’s instructions and were unaware of any inaccuracies in the submitted forms. Proving you had no knowledge of the fraudulent actions can be a strong defense strategy.

3. The Information Was Accurate at the Time
In a fast-moving real estate market, the value of properties and the financial standings of individuals can change unexpectedly. Perhaps when you applied for a mortgage, all the financial data you provided was accurate, but later changes (such as job loss or market fluctuations) shifted your situation. In these cases, a New York mortgage fraud lawyer could argue that the information wasn’t falsified or misleading at the time it was submitted.

A defense based on accurate information relies on showing that your financial or property details were in line with the facts when the mortgage application was processed and that any later deviations were unforeseen and not fraudulent in nature.

4. Misunderstanding or Clerical Error
Another strong defense is highlighting that an honest misunderstanding or clerical error led to the fraudulent claims. Mortgage forms and loan applications are often complex, and even small mistakes can lead to suspicion of fraud. Your lawyer may argue that the mistakes in the documentation were the result of human error rather than an attempt to deceive.
If the error was committed by a third party, such as a loan officer, your New York mortgage fraud lawyer will likely argue that you were not responsible for the mistake and had no fraudulent intent. By proving that inaccuracies were accidental, the defense could significantly impact the case.

5. Coercion or Duress
In some instances, individuals may be forced to commit fraudulent acts under the pressure of coercion or duress. If you can prove that you were compelled to participate in fraud due to threats, intimidation, or unlawful influence by others, this could be a viable defense. For example, a borrower may have been pressured into providing misleading information by a corrupt mortgage broker or real estate agent.

A New York mortgage fraud lawyer will work to show that you only participated in the fraudulent activities because you faced serious consequences if you didn’t comply. Establishing that you acted involuntarily diminishes your liability and can result in dropped or reduced charges.

Conclusion
Mortgage fraud accusations can carry heavy penalties, including fines and imprisonment, and defending yourself in such a case requires a nuanced legal strategy. Common defenses include demonstrating a lack of intent, showing a lack of knowledge about the fraudulent acts, or proving that any inaccuracies were the result of misinterpretations or human error. By working with a skilled New York mortgage fraud lawyer, you increase your chances of successfully navigating these complex allegations and protecting your future. 

How Does New York Law Define Mortgage Application Fraud?

Mortgage application fraud has become an increasingly scrutinized offense, particularly in high-demand real estate markets like New York. Understanding how New York law defines this type of fraud is essential, especially if you're navigating the complex world of mortgage applications or have been accused of fraudulent activities. Mortgage fraud can have severe legal consequences, but enlisting the help of a knowledgeable legal professional, such as a New York mortgage fraud lawyer, can help you manage accusations effectively. Below, we’ll break down what constitutes mortgage application fraud under New York law and the potential implications.

1. Falsifying Information on Loan Applications
One of the primary ways mortgage application fraud is defined involves the purposeful misrepresentation or concealment of information on a mortgage loan application. Common examples include inflating income levels, misrepresenting employment history, or providing false details about assets. Whether intentional or not, providing false information to secure a mortgage loan is illegal and can result in serious penalties.

A New York mortgage fraud lawyer can explain that many individuals falsely believe small misrepresentations – such as rounding up monthly income – are minor offenses. However, even minor exaggerations or omissions can trigger accusations of deceit, leading to legal dangers, including financial penalties, jail time, or both.

2. Identity Theft and Fake Identities
In some cases, individuals may go beyond mere misrepresentation in their loan application and fully engage in identity theft or the creation of fake identities. This often occurs when an individual cannot qualify for a loan based on their financial history or credit score, so they use someone else's identity or create a fictional identity to secure the mortgage. Mortgage fraud based on identity theft is a serious crime, and New York law has robust penalties for individuals convicted of such actions.

If you are accused of mortgage fraud rooted in identity theft or fake identity creation, consulting a skilled New York mortgage fraud lawyer is crucial. They can help you build a defense, analyze the case's facts, and potentially demonstrate that you were wrongfully accused or unaware of the fraudulent activities.

3. Straw Buyer Schemes
A straw buyer scheme is a tactic where an individual uses someone else’s name or financial information to take out a mortgage they wouldn’t be able to acquire on their own. In these cases, the “straw buyer” presents themselves as the borrower, but the actual person benefiting from the loan is hidden. Depending on how the fraud occurs, this could also lead to accusations regarding falsified documents, further escalating charges.

If you've been pulled into a straw buyer scheme or find yourself being accused of this fraudulent activity, a New York mortgage fraud lawyer can review the details of the allegation. They can help protect your rights and determine if you were unknowingly used in such a fraud or if there are mitigating circumstances that reduce the severity of the charges.

4. Appraisal Fraud
Appraisal fraud is another significant aspect of mortgage application fraud. This occurs when the value of the home is deliberately misrepresented to secure either a larger loan than the buyer qualifies for or a quick sale. Inflating property values for personal gain or misrepresenting appraisals to help others qualify for larger loans is illegal under New York law.

If you're under investigation for appraisal fraud, it’s time to consult a New York mortgage fraud lawyer. They have the knowledge to delve into appraisal reports, financial documents, and loan applications to determine if the accusations are legitimate, or if simple mistakes or oversights occurred during the process.

5. Concealing Additional Loans or Debt
A common form of mortgage application fraud involves concealing other outstanding loans or debts in order to appear more financially stable. Borrowers might intentionally omit information about credit card debt, car loans, or other mortgages in an effort to improve their loan eligibility. However, failing to disclose this information breaches the terms of the mortgage application and can result in charges of fraud.

A New York mortgage fraud lawyer can provide invaluable assistance in defending against such accusations. They can help demonstrate whether the omission was unintentional or based on confusion over what should be disclosed. Understanding exactly what financial information is required on a mortgage application is complex, and an experienced attorney can help to clarify these details.

Conclusion
Mortgage application fraud in New York has serious ramifications, from financial penalties to potential incarceration. Understanding how New York law defines different forms of fraud, such as falsifying information, identity theft, straw buyer schemes, appraisal fraud, and the concealment of additional loans, is essential in protecting yourself against accusations. If you find yourself accused, a New York mortgage fraud lawyer can offer the guidance and defense strategies necessary to navigate these serious charges. Seeking legal help early on can be a critical step in safeguarding your future. 

Can a Mortgage Fraud Lawyer in New York Help If You're Facing Federal Charges?

Mortgage fraud is a complex legal issue that often falls under both state and federal jurisdictions, particularly in states like New York where the housing market is dynamic and highly regulated. If you're facing federal charges related to mortgage fraud, it can be an overwhelming experience with severe consequences. Fortunately, a New York mortgage fraud lawyer can provide the knowledge needed to navigate the intricate legal landscape of federal charges. But how exactly can such a lawyer help in these situations? Let's take a closer look.

1. Navigating the Complex Federal Legal System
Federal charges are a different ballgame compared to state-level cases. While mortgage fraud at the state level is serious in its own right, being charged on a federal scale often means you're dealing with more severe penalties, including hefty fines, restitution, and prison time. Federal agencies like the FBI, IRS, or Department of Justice (DOJ) may be involved in your investigation. You will need a New York mortgage fraud lawyer who understands both state and federal laws to help mitigate the risks you're facing.

The federal legal system is notoriously complex, with its own procedures, evidence rules, and timelines. A skilled lawyer will guide you through the complexities of this system, from grand jury investigations to plea bargaining options, ensuring that no aspect of your defense is overlooked. Federal cases can move quickly and without the right legal representation, you might miss critical opportunities to build a strong defense.

2. Defense Against Federal Investigation Techniques
When federal authorities are involved, they often have extensive resources and investigative capabilities at their disposal. These agencies can gather a vast amount of evidence, including financial documents, bank records, and communication logs, all of which could be used against you. Additionally, they may use undercover operations or confidential informants to strengthen their cases.

A New York mortgage fraud lawyer will be well-versed in the methods used by federal agencies to build cases. One of your lawyer’s key responsibilities will be to carefully scrutinize how the evidence against you was obtained. If the evidence was gathered improperly, perhaps without a valid warrant or under unlawful conditions, your attorney can file motions to suppress the evidence, which could weaken the prosecution’s case.

3. Constructing a Strong Legal Defense
Mortgage fraud cases involve a range of fraudulent activities, from falsifying income on loan applications to schemes involving inflated property appraisals. Depending on the nature of your case and whether you're charged with civil or criminal offenses, a New York mortgage fraud lawyer will develop a defense strategy tailored to the specifics of your situation.

Common defenses might include proving that you were unaware of certain fraudulent activities, that errors in documentation were unintentional, or that you were misled by others involved in the process. If your case hinges on misunderstandings in the mortgage process or administrative errors, your lawyer may be able to argue that you had no intent to commit fraud, thereby greatly reducing your culpability. In federal cases, where the burden of proof is significant, these defenses can be the difference between conviction and acquittal.

4. Plea Bargaining and Settlements
In federal cases, it is common for the prosecution to offer plea deals to avoid a lengthy and costly trial. A plea bargain could involve pleading guilty to a lesser charge or agreeing to a reduced sentence in exchange for cooperation. However, plea bargains often come with long-term consequences, such as a permanent criminal record, which can affect your ability to work in certain industries or obtain credit.

A New York mortgage fraud lawyer will evaluate any plea deal to ensure it’s in your best interest. They negotiate with federal prosecutors to secure the most favorable terms, whether that involves reduced charges, financial restitution, or probation instead of incarceration. Because federal prosecutors are often open to negotiation, having a lawyer handle discussions ensures that you avoid agreeing to terms that could be detrimental to you in the long run.

5. Representing You in Court
If your case goes to trial, a federal courtroom can be an intimidating arena. The prosecution in federal cases is usually well-prepared and aggressive. You need a lawyer who is equally prepared to represent you, capable of challenging the government’s case at every turn. A New York mortgage fraud lawyer will handle every aspect of your trial defense, from opening arguments to cross-examination and closing statements.

Your attorney will also involve professionals when necessary, including forensic accountants or appraisers, to provide testimony that supports your defense. A robust legal strategy may also involve challenging the credibility of witnesses or presenting alternative interpretations of the evidence that cast doubt on the prosecution's theory.

Conclusion
If you're facing federal mortgage fraud charges, the stakes are incredibly high, but you don’t have to face it alone. A New York mortgage fraud lawyer brings valuable knowledge to the table, helping you navigate the complicated federal legal system, building a strategic defense, and negotiating on your behalf. From the initial investigation to trial, having the right legal support is essential to protecting your rights and securing a more favorable outcome. If you're under federal scrutiny for mortgage fraud, hiring a skilled attorney is one of the most important steps you can take to minimize the impact on your future. 

Lebedin Kofman LLP

Lebedin Kofman LLP

600 Old Country Rd # 205, Garden City, NY 11514, United States

(516) 212-4209