Lawmakers and enforcers generally define fraud as intentional misrepresentation and deception. There are many ways to commit fraud, all of which are criminal offenses.
One such offense is mortgage fraud. While the term can refer to predatory lending practices, it can also describe a borrower’s deliberate misrepresentation or omission of details to acquire or maintain house ownership.
Mortgage fraud is a pressing issue in Rhode Island, with repercussions that extend to homeowners, lenders, and the overall health of the real estate market. A homeowner can be prosecuted under one of two state statutes if they face mortgage fraud charges.
Procuring loan or credit on faith of false statement
According to one Rhode Island law, it’s illegal for a person to procure credit or a loan (such as a mortgage) upon the faith of a false statement in writing. This false statement can misrepresent or omit the borrower’s financial condition or ability to pay.
This offense is a misdemeanor, and each count of the offense is punishable by up to one year of imprisonment and $500 in fines.
Obtaining property by false pretenses or personation
Another state statute would consider mortgage fraud as a form of obtaining property through false pretense. Under that law, anyone who obtains money, goods, wares or other property by false pretenses intending to cheat is guilty of larceny.
Because the offense is a larceny crime, the penalties for larceny will also apply to violators of this law. If the value of the mortgage fraudulently appropriated exceeds $10,000, a conviction leads to up to 10 years of prison and $5,000 in fines.
Mortgage fraud is a serious offense in Rhode Island that can have long-lasting effects on individuals and the economy. For those facing allegations, it is imperative to seek legal counsel to navigate the complexities of the law and mount an appropriate defense.