The two broad kinds of cases
Mortgage fraud cases tend to fall into two groups. Some involve borrowers accused of misstating income, assets, employment, or whether they would live in the property in order to qualify for a loan. Others involve industry participants, such as brokers, appraisers, title agents, or organizers using straw buyers, accused of schemes for profit across many loans. Federal prosecutors commonly charge these cases as bank fraud, wire fraud, or false statements to a lender, and New York has its own residential mortgage fraud offenses. The type of case shapes the defense, because a single borrower's file presents very different questions from a scheme involving dozens of transactions.
Who wrote what on the application
Mortgage fraud defense frequently turns on authorship and knowledge. Loan applications were often filled out by a broker or loan officer, sometimes from a phone conversation, and the borrower signed a stack of documents at closing without reviewing each figure. Altered pay stubs or bank statements may have been created by someone else in the chain. None of that automatically excuses a false statement, but whether the accused person knew the information was false is the central issue. Reconstructing the loan file, including drafts, emails, and the broker's records, can show where the numbers came from. Co-defendants who are cooperating with the government may tell a different story, which makes the documentary record even more important.
Early steps in the defense
If an investigator from a federal or state agency or from a lender contacts you, you can decline to be interviewed and ask that communication go through counsel. Do not contact other people involved in the loan to compare recollections, since that can be viewed as coordinating stories. Collect what you have: closing documents, tax returns and pay records from the relevant period, and any communications with the broker or lender. Immigration status, professional licenses, and other collateral effects should be raised early. In a first meeting we sort out which loans are at issue, who is investigating, and whether you appear to be a witness, a subject, or a target.
