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Defending Against Federal Mortgage Fraud Charges in South Carolina

June 13, 2023

Facing federal mortgage fraud charges can be overwhelming and have serious consequences. Because the penalties for conviction can be severe, it is crucial to have capable and experienced legal representation on your side. At McCoy Law Group, we understand the complexities of these cases and the impact they can have on your life. If you find yourself charged with federal mortgage fraud, it is crucial to act promptly to protect your rights.


Understanding Federal Mortgage Fraud in South Carolina

Federal mortgage fraud refers to the act of intentionally deceiving or misleading a federally insured lending institution, such as a bank, in order to obtain a mortgage loan or gain more favorable loan terms. It involves making false statements, providing fraudulent documentation, or engaging in deceptive practices during the mortgage application process. The fraudulent activities can include inflating property values, concealing financial information, using straw buyers, or participating in schemes to profit illegally from property transactions. Federal mortgage fraud is a serious offense that falls under federal jurisdiction and can lead to substantial penalties, including fines and imprisonment if convicted.


After the mortgage crisis in 2008, federal authorities have become more vigilant in detecting and prosecuting mortgage fraud to ensure economic stability and prevent individuals or businesses from being defrauded. Federal mortgage fraud is a significant offense, and it's essential to take immediate action to navigate the legal process effectively.


Different Types of Federal Mortgage Fraud

Mortgage fraud can encompass various schemes aimed at defrauding federally insured lending institutions. Some common types of federal mortgage fraud include:


  • Silent Second Schemes: A silent second mortgage refers to a type of secondary loan that is obtained without the knowledge or consent of the primary lender. In this arrangement, the borrower takes out a second mortgage on a property while keeping it hidden from the first mortgage lender. The term "silent" refers to the fact that the primary lender is unaware of the existence of the second mortgage.


  • Nominee/ Straw Buyer Loans: A "straw buyer" is employed to buy a property on behalf of an investor who wouldn't have been eligible for the loan due to having numerous other property loans. The investor's plan is typically to sell the property at a profit within a few months, but if the market suddenly declines, the investor may default on the loan and become entangled in a property-flipping scheme. Despite the initial legitimate intentions of the scheme, the investor can face fraud charges for the deceptive practices employed to acquire the real estate.


  • Foreclosure Schemes: This is a fraudulent scheme that takes advantage of homeowners facing foreclosure on their properties. In a foreclosure scheme, individuals or organizations exploit the distressed financial situation of homeowners by offering false promises of assistance or relief in order to defraud them. These schemes often involve perpetrators who pose as foreclosure rescue companies, offering services such as loan modification, foreclosure prevention, or assistance in negotiating with lenders. However, their true intention is to deceive homeowners and unlawfully profit from their vulnerable situation.


  • Inflated Appraisals: Corrupt appraisers, title companies, and others inflate property values in a series of transactions, allowing individuals to pocket the proceeds.


Penalties for Federal Mortgage Fraud Convictions

The consequences of a federal mortgage fraud conviction can be severe. Depending on the specific charges and circumstances, penalties may include substantial fines, mandatory education or treatment programs, probation, and imprisonment. The intended loss caused by the fraud scheme is often a factor in determining the severity of the penalties.


If you are accused of mortgage fraud, you may face criminal charges under various federal offenses, which include:



A conviction for violating 18 U.S.C. § 1014 could result in a maximum prison sentence of 30 years, a fine of up to $1,000,000, or both. It's important to take these charges seriously and seek the guidance of an experienced attorney who can provide effective legal representation and protect your rights.


How Mortgage Fraud Charges Can Be Resolved

When facing federal mortgage fraud charges, various avenues for resolution exist. These may include:


  • Dismissal by the Prosecutor: If there is insufficient evidence or other legal factors, the prosecutor may dismiss the charges against you. Our experienced attorneys will meticulously examine the details of your case to identify potential grounds for dismissal.


  • Diversion Programs: In certain cases, diversion programs may be available as an alternative to traditional prosecution. These programs focus on rehabilitation and addressing underlying issues rather than punishment.


  • Plea Agreement: A plea agreement may be reached between the defense and the prosecution, leading to reduced charges or a lesser sentence in exchange for cooperation or other factors.


  • Contested Trial: If your case proceeds to trial, our skilled attorneys will diligently represent you, challenge the prosecution's evidence, and present a strong defense strategy on your behalf.


Why Choose McCoy Law Group for Federal Mortgage Fraud Defense

At McCoy Law Group, we have a deep understanding of federal mortgage fraud laws and extensive experience in criminal defense. Our dedicated attorneys will provide you with effective legal representation and strategic guidance throughout the process. We will analyze the evidence, assess your options, and develop a tailored defense strategy to protect your rights and pursue the best possible outcome.


Our empathetic and knowledgeable team will support you every step of the way, ensuring you are well-informed and prepared throughout the legal proceedings. We prioritize your well-being and will fight tirelessly to safeguard your future.

Protect Your Rights with McCoy Law Group

If you are facing federal mortgage fraud charges, it is essential to seek immediate legal representation. Contact the McCoy Law Group today for a confidential consultation. Our experienced attorneys are ready to listen, provide expert legal advice, and fight for your rights.

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