Mortgage fraud is, unfortunately, an ongoing problem all over the country. When the 2008 Financial Crisis struck, many people lost their homes as the banks foreclosed on them. But, many banks do not directly attempt to collect on bad debts because the cost is too high. Instead, many banks sell the debts for pennies on the dollar. The “new” creditors then try to collect on the debts.
During this process, many paperwork and information are lost. For example, mortgage statements are misprinted, payments are lost, and other problems. Rather than sort through the paperwork, some of these companies engaged in mortgage fraud which uses misrepresentations to trick people into paying new debts or on old debts that are either uncollectible or paid off.
Mortgage fraud is illegal in all forms. Unless the creditor can product records substantiating that you are the debtor and the debt is good, they cannot collect from you. More than one-third of states have laws that prohibit mortgage fraud in one form or the other. Additionally, federal law prohibits mortgage fraud. Federal law can convict people because most crimes involve the use of phones or the Internet, which implicate wire fraud laws.
If your mortgagor engaged in fraud, then you may be entitled to civil damages as a result of the fraud. A lawyer can review your claim and explain the various theories under which you may seek recovery. For example, you can pursue compensation under breach of contract, conspiracy to defraud, breach of trust, and/or misrepresentation. You don’t need to fight this on your own; an attorney can help you get compensation if you were the victim of mortgage fraud.