Federal Statute of Limitation on Mortgage Fraud

Mortgage fraud has become a serious cause of concern. It has disturbed the financial equilibrium worldwide. The subprime mortgage crisis has caused a severe credit crunch and upset all the macroeconomic indicators of the country. In the year 2006, the Federal Financial Crimes Enforcement Network prepared a list of states where incidence of mortgage fraud is high. The highest number of mortgage fraud takes place in California, Florida, Georgia and Texas.

Mortgage fraud can be of various types. It involves sellers, buyers, real estate agents who manipulate and forge documents to help a consumer qualify for a mortgage loan. The amount that is received in excess is distributed among the ones involved in the deal. Eventually, if the buyer fails to make payments to the lender, the lender gets an opportunity to foreclose on the property.

In order to minimize mortgage fraud, the Fed has adopted several measures. Not only this, every state has its own law to protect the home buyers from fraudsters operating in the real estate market.

Empowering Law Enforcement Agencies

To reduce such incidents and protect home buyers from fraudsters, legislative action was taken to give more power to the law enforcement agencies. The law enforcement agencies were entrusted with the responsibility of detecting and prosecuting mortgage fraud.

Increasing the Statute of Limitation on Mortgage Fraud

The law makes it mandatory that every mortgage loan applicant should be well informed about the consequences of furnishing false information. It defines mortgage fraud and states that if anyone is found encouraging or working against the mortgage loan norms and guidelines may be imprisoned for a period of 99 years also. As far as the federal statute of limitation on mortgage fraud is concerned, the SOL on mortgage fraud can be extended up to 7 years also. The main reason for this is to successfully prosecute maximum number of cases related to mortgage fraud.

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