Mortgage Fraud Charges in Georgia

Mortgage fraud has become a big problem in Georgia over the past few years. With the housing boom in the 2000’s, there were a lot of shady characters trying to make a quick buck through mortgage fraud. The Georgia legislature has passed specific laws to crack down on this type of fraud.

In 2020, twelve people were charged in a huge mortgage fraud case in Atlanta. According to the Department of Justice, these people ran a scheme for years where they provided false information on mortgage applications in order to get approved for loans. They made up fake employers, incomes, assets, and other lies to trick the banks into lending them money. Some of the people charged include Donald Fontenot, Katrina McCall, and Garfield Taylor. You can read more details about the case here: Twelve charged in multi-year mortgage fraud scheme.

Georgia has passed specific laws making it a crime to commit mortgage fraud. The Georgia Residential Mortgage Fraud Act covers things like:

• Fake appraisals
• Bogus sales contracts
• False information on mortgage applications
• Fake employment and income verification
• Made up assets
• Other lies to get a mortgage approved

You can see the full law here: Georgia Residential Mortgage Fraud Act. The state government wants to crack down hard on people trying to rip off banks and homeowners through shady mortgage deals.

If you suspect mortgage fraud is happening, you can report it to the Georgia Department of Banking and Finance. They have a form on their website where you can provide details about the potential fraud: Report Mortgage Fraud.

Under Georgia law, residential mortgage fraud is a felony. If convicted, you can face 1-10 years in prison, fines up to $5,000, or both. The penalties get even worse if it was part of a big conspiracy. Then you can get 3-20 years in jail and fines up to $100,000! Each fraudulent deal is a separate offense too. So if you did 10 shady mortgage transactions, that’s 10 felonies. You can see the law on penalties here: Georgia Code 16-8-105.

Typical Schemes

There are a bunch of common mortgage fraud schemes that pop up in Georgia:

• Appraisal fraud – Getting a fake appraisal that overvalues a home so you can get a bigger loan.
• Income exaggeration – Lying about your income on a mortgage application.
• Fake down payment – Making up money you used for a down payment.
• Silent second – A secret side deal with the seller to inflate the price.
• Straw buyers – Using someone else’s credit to buy property for you.

Lots of people think it’s no big deal to fudge a little info to get approved. But mortgage fraud is a serious crime that can land you in prison! It also hurts communities by inflating housing prices and contributes to economic downturns like the 2008 crisis.

How to Avoid Charges

The best way to avoid mortgage fraud charges is simple – don’t lie on any part of your mortgage application! Honesty is always the best policy. Here are some tips:

• Work with an ethical lender – find a reputable company.
• Report any suspicious activity.
• Never sign something you don’t fully understand.
• Watch out for promises that seem too good to be true.
• Consult a lawyer if you have concerns.

If you come clean about any past fraud, you may be able to avoid charges. Talk to a lawyer to understand your options. Mortgage fraud is a big deal that can really ruin your financial future.

Victim Resources

If you were the victim of mortgage fraud in Georgia, help is available. Here are some resources:

• Report it to the Georgia Department of Law’s Consumer Protection Unit: Consumer Protection Unit
• File a complaint with the Consumer Financial Protection Bureau: CFPB Complaint
• Consult the U.S. Department of Housing and Urban Development approved counselors: HUD Counselors
• Contact Georgia Legal Aid for free legal help: Georgia Legal Aid

You may be able to recover financial damages, get the fraudulent transactions reversed, receive loan modifications, and get justice. Don’t struggle with mortgage fraud alone.

The Bottom Line

Mortgage fraud is running rampant in Georgia. State lawmakers have passed tough statutes to crack down on this criminal activity. Penalties can include years in prison and major fines. Avoid mortgage fraud charges by being 100% truthful on all mortgage documents. If you are a victim, seek help from legal aid organizations and consumer protection agencies. Together we can reduce mortgage fraud and keep the Georgia housing market ethical and secure.