What if I am arrested for “mortgage & real estate fraud” in Nevada? (NRS 205.372)

What if I am arrested for “mortgage & real estate fraud” in Nevada? (NRS 205.372)

-Perhaps no state has been more
affected by the foreclosure crisis than the state of Nevada. And in the wake of the
foreclosure crisis, what we’re seeing is that law enforcement
has really ramped up investigation as to
what the root causes, or what they feel the root
causes of the mortgage crisis are. So right now in the
state of Nevada, we’re seeing a lot of
prosecutions where allegations of mortgage fraud
come into play. And mortgage fraud encompasses
a wide range of scenarios, involving deceptive
mortgage practices. It can involve false information
provided to a lender. It can involve artificially
high appraisals that help to entice the bank
to lend a large amount of money for the purchase of a home. It can involve straw buyers. All of which are
prosecuted in Nevada under the title
of mortgage fraud. -Here in Nevada, one common
example of mortgage fraud is what is known as a false
loan modification scheme. This often involves
someone trying to prey on a
distressed homeowner, by perhaps offering to reduce
principal, avoid foreclosure, and allow someone to
stay in their home. Oftentimes, that
person will take money up front, but then
not do anything for that distressed homeowner. And they often go into
foreclosure anyway. -Another common example of
mortgage fraud here in Nevada is using false information
on loan applications. Now today, lending standards
have become much more strict. And Lenders will want to verify
your income and your assets and your debts and your taxes
before authorizing a loan. But back in the day,
before the market crashed, there were lots
of mortgages that were issued based on what
was called stated income. And these sort of gained a term
in the industry, liar loans. Liar loans, because
people would lie. They would lie
about their income. They would lie about the assets
that they had for collateral. They would lie about their
debts and liabilities. And none of this what
was really verified. And what I think a lot of
people didn’t realize, or didn’t pay attention to at
the time, is that they were signing under
penalty of perjury that all of this information
was true and correct. And today what we’re seeing is
state and federal authorities going back and prosecuting many
of these people for mortgage fraud, for perjury, based
on this misinformation that they put in
their applications. And the reality of
the situation is that a lot of these listing
agents and escrow officers and lenders had an incentive
to push these deals through. They wanted their commissions. And so, they would really
coach the loan applicants in what they needed to
say to meet the lending standards to get the
loan, even if that meant providing misinformation. And the culture in
the industry sort of became that this was just
how things were done. These were how deals were made. This is how people
got their homes. This is how people
made their investments. Everybody was doing it. It wasn’t seen as something
that was unethical or illegal. And people who did
provide misinformation and perjured themselves
never imagined that they would someday face
the consequences of being prosecuted for a felony and
going to prison for what they did. -Straw buying usually
involves a situation where someone wants
to buy a home, but they lack good credit. So usually that person
will recruit someone else, often known as the straw
buyer, with good credit, to stand in for them in order
to obtain a loan from a bank. That person can find themself
facing bank fraud because they deceived the bank into providing
them a loan for someone who actually did have bad credit. -It’s not uncommon to see
a straw buyer scheme where the straw buyer is really
more of an unwitting victim to the sophisticated
scheme of other players. So a straw buyer may be offered
several thousand dollars to sign documents for the
purchase of a property where there were third parties
like the buyer or the mortgage lender or the realtor that had a
lot more to gain than the straw buyer. And the straw buyer
is the one that’s being prosecuted and
made the scapegoat for the entire transaction. -The main statute here in Nevada
with regard to mortgage fraud is NRS 205.372, which
makes it a felony to be involved in a deceptive
mortgage fraud transaction. If you’re convicted
under this statute, the penalty is what we call
a category C felony here in Nevada, which is 1 to
10 years in state prison. However, if the court
finds that there’s been a pattern of
mortgage fraud activity, then it becomes what we
call a category B felony, and the penalty is 3 to 20
years in Nevada state prison. You could also be
prosecuted separately for perjury, which carries 1
to 4 years in state prison. And also, you
could be prosecuted by the federal authorities
and be sent to federal prison. So the stakes and
the consequences of being convicted for one of
these mortgage fraud crimes are draconian. And if you find yourself charged
with one of these mortgage fraud schemes, you
want to do everything possible to fight the case
and avoid being convicted. -Ultimately here in the state
of Nevada, what we’ve seen is that law
enforcement is casting a very wide net over the
whole state of Nevada. And consequently, a
lot of innocent people, particularly here
in Clark County, Las Vegas, Nevada,
have been reeled in and are being prosecuted for
mortgage fraud-related crimes. Here at the Las
Vegas Defense Group, we are determined to make
sure that our clients are not wrongfully drawn in by
this widely-cast net. And we intend to defend each and
every one of our clients based on the specific roles
that they play to ensure that an innocent,
small, or no role player or does not get sent to prison
as a scapegoat for the actions of more sophisticated parties. -The most common defense
in a mortgage fraud case is that the individual did not
have the intent to defraud. In Nevada, mortgage fraud
is a specific intent crime. One cannot be convicted of
mortgage fraud unless the state is able to prove beyond
a reasonable doubt that the individual had a specific
intent to defraud someone else. Therefore, if someone
is acting in good faith and did not have the intent
to deceive someone else, then the person is not
liable for a crime. -Another common defense to
mortgage fraud here in Nevada, is that the person was
acting under the instructions or information
provided by others. So for example, you may have
been an escrow officer who was simply acting under the
directive of your employer. Or you may have been a
loan officer who was just acting on information that was
provided to you by appraisers and applicants. If you were acting
in good faith, just on information
and instructions given to you by third
parties, then again, you should not be held
liable for mortgage fraud. -During the time when the seeds
of this crisis were planted, it was very easy to get a loan. And there was a lot of
pressure on mortgage lenders and appraisers. The higher the appraisal value,
the more the bank would lend. Sometimes people could get
money out on the front end to furnish the home, or to
pay off debts in the process. So it became a magical elixir. And so we saw a lot
of scenarios where people bit off more
than they could chew. They bought a house that wasn’t
really worth what they thought it was, found themselves in
debt, ultimately lost the home, and may now be
facing prosecution in the wake of everything
that they’ve already lost. Ultimately, we have
to ask ourselves as a community, who do we blame
for the events that unfolded and the harm that was caused. Do we scapegoat and blame
the appraisers, the mortgage lenders, the realtors,
or do we ultimately have to just accept some
shared responsibility and try to move forward
in a positive direction?

3 thoughts on “What if I am arrested for “mortgage & real estate fraud” in Nevada? (NRS 205.372)

  1. I have proof from A to Z done Fraudulent on my home. I am not one to sit around and talk blows about what the title company Broker and bank has done I take action by constantly replying to the bank when ever they send something that way they know I am abreast of the new laws and also know the illegal trail that was done to my home starting with the universal loan application. The application was not only typed out but on only the first page a copy of my fathers signature was placed on there.

  2. A signature needs to be on all pages. They took a loan out came in and paid my mortgage off stating my father made $12,000 per month in trucking. They took advantage of a senior citizen and thought they could get away with it. Then they claimed they were short to close for $1,790.12 and on the closing stating stated my father brought that in. It took my 3 months to get a copy of that check. Lawrence title wrote the check for a whole other title nothing to do with my home.

  3. What a dreadful situation! But thank you for sharing your experiences.

    ~Las Vegas Defense Group, L.L.C.
    702-DEFENSE (333-3673)

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