Link

Argument preview: Justices to assess penalties for subprime mortgage fraud

Argument preview: Justices to assess penalties for subprime mortgage fraud

The Court has considered surprisingly few cases arising directly out of the subprime mortgage crisis, but it will get one in February in Robers v. United States, in which it will consider the proper amount of restitution due from a defendant convicted of wire fraud related to a home mortgage loan.

The issue is a simple one of statutory interpretation.  Robers participated in a mortgage-fraud scheme in which he submitted fraudulent loan applications to obtain mortgages that he had no intention of paying. When he did not pay the mortgages, the lenders conducted foreclosure sales, at which they purchased the homes that the fraudulent mortgages encumbered.  Under the relevant statute, Robers must pay restitution equal to the difference between the amount of money he took from the banks by fraud and the amount of any property he “returned” to the lenders.  He claims that the value of the homes declined between the date of the foreclosure and the date that the lenders eventually sold the homes on the open market.  The question is whether the credit he gets for returning the homes to the lenders should be based on the appraised value of the homes on the date of the foreclosure or their value as of the date that the lenders sold them (and thus converted them into cash).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s