05 Jul 20

NY Penal Law § 187.10: Residential Mortgage Fraud in the Fourth Degree

| by

Last Updated on: 5th August 2023, 01:32 am

According to the New York criminal code, residential mortgage fraud is defined as knowingly giving a false written statement with reference to a residential mortgage loan, with the intention of committing fraud. For the purposes of the residential mortgage fraud statute, the term “residential real property,” refers to real estate that has been improved by the construction of a 1 to 4 family dwelling. If you take out a mortgage on undeveloped land which you intend to improve by building a residence, that property would not be considered residential real property according to this statute. The criminal code lists 5 offenses related to residential mortgage fraud.  They are residential mortgage fraud in the first, second, third, fourth and fifth degrees. The particular crime that you will face depends upon the dollar amount of money that was received as a result of the fraudulent act.  You could be charged under New York Penal Law § 187.10 with residential mortgage fraud in the fourth degree if you commit residential mortgage fraud and the dollar amount involved is more than $1000 but less than $3000.

For Example

The town was offering a special program designed to connect buyers with dilapidated, abandoned homes. The town was selling the homes for only $3000, as long as the purchaser agreed to renovate the home they bought and live in it within 1 year after the purchase. Kobe viewed the program as the opportunity to finally have a home of his own. Unfortunately, Kobe was unemployed and he was afraid that he would not be approved for a mortgage. Because of this, Kobe lied about his employment status and his income on the mortgage application. That application got him approved for a $2500 loan. Although Kobe did lie about a material fact on his mortgage application, Kobe cannot be prosecuted under this legislation, since his intention was indeed to occupy the property secured by the mortgage loan.

Offenses that are Related

Residential mortgage fraud in the fifth degree: New York Penal Law § 187.05

Residential mortgage fraud in the third degree: New York Penal Law § 187.15

Residential mortgage fraud in the second degree: New York Penal Law § 187.20

Residential mortgage fraud in the first degree: New York Penal Law § 187.25

Possible Defenses

You cannot be successfully convicted of residential mortgage fraud in the fourth degree if 

  1. the false statement you gave was unrelated to any material fact, 
  2. you did not “knowingly” give the false statement, or 
  3. you did not have any intention to defraud. 

On top of that, if the property involved was not a “residential real property” as defined by the statute, then you have a good defense against a residential mortgage fraud charge.

Moreover, under New York Penal Law § 187.01, if you are applying for a residential mortgage loan or you intend to reside in the residence that you are taking a mortgage out to secure, you cannot be prosecuted for the crime of residential mortgage fraud.

The Sentence

The crime of residential mortgage fraud in the fourth degree is categorized as a class E felony. If you are convicted of this offense, the judge may sentence you to prison for up to 4 years. You might also receive a probation sentence of up to 5 years and be obligated to pay a fine.