NY AG Letitia James charged with mortgage fraud – a crime seldom prosecuted and rarely resulting in prison

Core Insights - Mortgage fraud is back in the spotlight due to recent indictments involving high-profile individuals, including New York Attorney General Letitia James and Federal Reserve governor Lisa Cook [1] - Historical context shows that mortgage fraud has been a recurring issue, notably contributing to the 2008 financial crisis and the savings and loan crisis of the 1980s [1] Mortgage Fraud Overview - Mortgage fraud involves intentional misrepresentation of facts to obtain a property loan, including false claims about income, assets, or occupancy status [4] - The consequences of mortgage fraud can be severe, with maximum federal sentences reaching up to 30 years and fines up to $1 million [5] Conviction Statistics - Data from the U.S. Sentencing Commission indicates that only 38 individuals were sentenced for federal mortgage fraud in 2024, with a total of fewer than 3,000 convictions over the past 12 years [7][8] - The conviction rate is extremely low compared to the number of mortgages issued, with only 0.003% of mortgage recipients facing federal charges [8] Demographics of Convicted Individuals - The majority of those convicted of mortgage fraud are men, with over 90% being U.S. citizens, and the typical profile being a man in his late 40s with an associate degree [9] Sentencing and Penalties - Despite the potential for a 30-year sentence, the average jail time for convicted individuals is only 21 months, with 15% receiving no jail time at all [11] - Fines imposed are generally much lower than the maximum, with the average fine being less than $6,000 since 2013, and many convicted individuals paying no fine [12] Restitution and Financial Impact - Courts often require restitution, with half of those convicted in 2024 needing to pay at least $500,000 to victims, and the average restitution amount over the past 12 years being $2 million [13] Comparison with Other Events - The rarity of mortgage fraud convictions is highlighted by a comparison to lightning strikes, with more people struck by lightning annually than those convicted of mortgage fraud [15]