Florida’s Mortgage Fraud Penalties Steepened

The state Senate, in the wake of Florida's real estate downturn and rapid rise in Florida foreclosures, passed a second bill increasing the penalties for those convicted of mortgage fraud.
Not only is the legislation increasing penalties for mortgage fraud but they are also creating a remedy for some of the damage mortgage fraud can inflict on neighborhoods and condominium buildings in the form of higher property taxes.
According to the Federal Bureau of Investigation, Florida has the fastest growing white-collar crime rate in the nation and is a hotbed for real estate fraud.

SCHEMES
Mortgage-fraud schemes typically involve:

1. Inflated appraisals, which criminals need to, drain off funds as cash under the table, larger fees and commissions, and usually all three from bigger loans.
2. Fake sales data therefore can enter the pool of values that property appraisers use to derive tax assessments on surrounding Florida homes, leading to higher property taxes for those homeowners.
3. The legislation requires law enforcement to promptly notify the appraiser when probable cause for mortgage fraud exists and that may have affected the value of a given property. The appraiser then may reassess the home and others homes surrounding it.

POLICE RESPONSE

1. The bill was backed by Glenn Theobald, chief counsel for Miami-Dade County Police Department and said the department was ready to deliver suspicious properties to the property appraiser once the bill becomes law. The location of the properties was left undisclosed.

PENALTIES INCREASED

1. For more than $100,000, the legislation increases the penalty of mortgage fraud on home loans to a second-degree felony, rather than a third-degree felony and makes it punishable by up to 15 years in prison and up to $10,000 in fines.

FRAUD SENTENCE
Last week, an architect, Richard Crowder II, the of a $37 million mortgage-fraud scheme involving 17 luxury South Beach condos was sentenced to nine years in prison. Former title attorney Gary Mills, who owned Deerfield Beach-based Four Star Title, and former Wachovia loan officer, Karen Lynn Sullivan, his accomplices, were sentenced respectively to 46 months and 50 months. OUCH!

Contributed by MLR Realty