As a homeowner or real estate investor, you might find yourself contending with mortgage fraud charges linked to property flipping. Perhaps you bought a property with plans to renovate and sell it, but these actions have led to criminal accusations. Was this a simple error, or did you unintentionally violate the law?
A thin line exists between legitimate property flipping and illegal activity
A type of mortgage fraud, illegal property flipping usually occurs when someone buys a property and sells it quickly at a significantly higher price. Consider these factors:
- Your intent: Did you genuinely want to renovate and resell the property? You will need detailed records of your renovation expenses, timelines and marketing efforts to show your true intentions.
- Appraisals: Did you inflate the property’s value through fraudulent appraisals? It helps your case if you relied on a licensed appraiser and did not influence their assessment.
- Disclosed information: Did you accurately represent your finances and the transaction details to the lender? Unintentional errors or omissions are different from deliberately providing false information.
- Unusual transaction patterns: Did you engage in unusual transactions? These may include rapid property buying and selling or transactions involving shell companies or straw buyers.
In general, property flipping is legal as long as your actions comply with state and federal laws. However, it becomes illegal if you use fraudulent activities to obtain a mortgage loan.
Texas law and the Federal Bureau of Investigation (FBI) take illegal property flipping seriously. Those found guilty may face severe penalties, including fines and imprisonment.
Do not confront these legal challenges alone
If you are up against illegal property flipping and other mortgage fraud allegations, it is crucial to work with a skilled Texas attorney as soon as possible. Your attorney can review whether you have unintentionally engaged in illegal activity or if other factors are at play. If needed, they can build a strong defense and strive toward a positive outcome.