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Mortgage Fraud

The term Mortgage Fraud can encompass a wide range of conduct, from a wide range of actors. In a mortgage transaction, there can be a mortgage broker, a real estate broker, a title company, a home inspector, an appraiser and lawyers. Any of these actors can sometimes engage in fraudulent or negligent practices which can wreak financial havoc on a consumer or businessperson. They may need to consult a New York City mortgage fraud lawyer to protect their interests.

Under both New York state law and the federal Truth in Lending Act 15 U.S.C. §1635, a consumer has a 3 day right to rescind a refinance or home equity mortgage transaction; that is until midnight of the third business day after the transaction to cancel the mortgage. But first:

  • The consumer has to sign the mortgage, coupled with a “Promissory Note”; and
  • The consumer must be given a Truth in Lending disclosure document which outlines the substantive terms; See What is a Closing Disclosure? according to Consumer Financial Protection Bureau Website
  • The consumer must be given 2 copies a Notice which outlines the right to cancel the mortgage;

But a diligent consumer will rescind only if he/she feels something did not “smell right” with the mortgage. Maybe after the closing, the person goes home, carefully reads the papers and does not recognize a term or condition that was supposed to exist but does not. Oftentimes a mortgage broker, lawyer or realtor says something that does not quite make it to the paperwork. Both state and federal law allows this 3-day right if the consumer has “cold feet.”

But many times a mortgagee identifies a discrepancy long after that 3 day right has expired. Maybe the appraisal was far too high; maybe the interest rate or term of the loan was not represented correctly; maybe an adverse condition of the property was hidden; maybe there are lien(s) attached to the property that were not properly taken care of. All in all, there are so many aspects of a mortgage transaction that can go awry. Sometimes consulting a New York City mortgage fraud attorney and pursuing litigation is the only answer to solve an issue on a consumer’s most valuable asset.

In the advent of the financial crisis of 2008 and continuing, it was found that banks and other financial institutions were, to say the least, “overreaching.” Appraisals were sky high to allow for falsely inflated loan amounts. This practice among others, fueled the housing market creating a “bubble” that burst with the fall of Lehman Brothers and AIG.

No income, No Job, No Asset (codename “N.I.N.J.A.”) loans used to be the flavor of the day. Mortgage brokers would boast: “if a consumer could breath, he/she could get a mortgage.” There was simply no income verification back then fueling the massive volume of loans and the bubble in home prices.

Those bank practices above are only a few examples of what went to the heart of “Mortgage Fraud” but they are not an exhaustive list, as our mortgage fraud lawyers in New York City understand.

Mortgage rescue scams were prevalent back then, but they still exist today. Mortgage investors prey on homeowners in a time of distress: when they could no longer pay the mortgage or were already in foreclosure proceedings. These took the flavor of offers that will stop or delay foreclosure payments for an upfront fee or make payments on your behalf. Insidious are even companies claiming to be a government entity, or those that work with attorneys but do not actually provide legal services.

If you feel you are a victim of mortgage fraud, do not hesitate to contact The Linden Law Group, P.C. at (212) 835-1532 for a free phone consultation with a mortgage fraud attorney in New York City. We handle mortgage fraud cases in the five New York Boroughs: Bronx, Manhattan, Brooklyn, Staten Island and Queens, and Long Island and some upstate New York counties.

Client Reviews
I highly recommend this law firm. Attorneys Unger and Benjamin battled a real estate scammer who defrauded me out of substantial money. They were able to get a good result for me after the defendants put up numerous obstacles and delays over 18 months. And they were honest with me regarding their upfront and contingency fees. Definitely hire this firm if you are a victim of fraud or breach of contract. Rebekah W.
Over the years I have had dealings with many of attorneys and I can honestly say that Mr. Benjamin is the best lawyer I have ever worked with. He's conscientious, and takes care of your case as if his own interests were at stake. He's professional, always answered my calls and takes the time to discuss the best course to take. Everything was done timely and efficiently. I couldn't be happier with the result. I wish they were all like him. The best decision I made was to use him for all my legal needs. Nancy O.
Attorney Benjamin is an excellent attorney. He battled a finance company for me for nine years, defeating multiple motions that were thrown at him over the years. He is an honest, compassionate and trustworthy attorney, and was an aggressive advocate for me for a long time. After so many years, he finally got a great result in August, 2015 after defeating still another motion by the lender. I highly recommend Attorney Benjamin. Daniel O.
We hired this Firm on July 20, 2018 to sue a company for fraud. While the case took longer than we wanted, the lawyers battled for 1 year with this nationwide real estate company to expose the scam they inflicted on us. In order to get to settlement, our lawyer Jeffrey Benjamin cut the Firm's fee in order that we could put more money in our pocket and settle. The lawyers here are honest and bent over backwards to make us happy and settle, and not drag out the case for years. We are so happy we went with this Firm. Thank you. K.J.