re: CNN: “Everyone in America commits mortgage fraud!”

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This “senior officer in banking” apparently doesn’t even know what she’s been charged with.

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1. Bank Fraud (18 U.S.C. § 1344)

Definition: Knowingly executing, or attempting to execute, a scheme to defraud a financial institution or to obtain money, property, or credit from a financial institution by false pretenses.

Connection to a misrepresented multi-unit property:

If James represented a 5-unit property as a 4-unit property, she could potentially qualify for loan terms only available for 1–4 unit residential properties.

This misrepresentation could be seen as a scheme to defraud a bank, because the bank might have approved the loan or offered better terms based on false information.

2. Making False Statements to a Financial Institution (18 U.S.C. § 1014)

Definition: Knowingly making a materially false statement to a bank or other federally insured financial institution in any matter relating to a loan.

Connection to a misrepresented multi-unit property:

If the mortgage application falsely claimed that the property had fewer units than it actually did, that is a material false statement, because it affects the bank’s risk assessment.

Even if the misrepresentation was “small,” courts often consider whether it could influence the bank’s decision to grant the loan.

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