A 38-year-old Spring Hill man pleaded guilty to making a false statement in an application to obtain a United States Department of Housing and Urban Development (HUD) loan earlier this month.
He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been scheduled.
According to the plea agreement, the man purchased his home in Spring Hill for $110,000 on September 28, 2010. He and his wife apparently received a loan of $49,650 from HUD’s Neighborhood Stabilization Program (NSP), as a second mortgage on the home. The NSP was established by HUD to provide emergency assistance to stabilize communities with high rates of abandoned and foreclosed homes. The NSP was designed to assist households whose annual incomes are up to 120 percent of the area median. According to this loan program, the man would not have been required to repay the loan if he lived in the home for 15 years.
In his application to participate in the program, the man apparently provided false and incomplete information related to his debts, assets, employment, income, and tax returns. According to reports, he failed to disclose a debt from another loan that he had received from another government program to obtain a different home. Reports also indicate that he did not disclose income he earned from his DJ business, or that he owned certain assets, including two cars and a boat.
This case was investigated by the HUD Office of Inspector General and the Hernando County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Adam M. Saltzman.
One of the most common kinds of financial institution fraud involves loan or mortgage application fraud. In the past decade or so, many bank and mortgage company officials have encouraged individuals to misstate their income and other items on mortgage or loan applications. When these borrowers fail to make their payments, the bank then reviews the applications, looking for misrepresentations of income or other falsified information. If the banks happen to find something, they will then hand the case over to the federal government for prosecution.
The bottom line is that the banks and mortgage lenders attempt to use the government as a collection agency, to collect on bad loans they encouraged people to take in the first place.
It is important to understand that you can be charged in federal court for mortgage or bank fraud under the following circumstances:
- The bank or mortgage company knew you were making a false statement
- Bank or mortgage company employees encouraged you to misrepresent the facts
- Regardless of how much of the information on your application was inaccurate.
- If your loan application was denied and the information provided was false
If you are facing charges related to making a false statement on a loan or mortgage application, our Hernando County White Collar Crimes Lawyers at Whittel & Melton can help. To arrange a free consultation with us, please call 352-666-2121 or contact us online.