President Donald Trump checked another name off his political enemies list on Thursday when federal prosecutors indicted New York Attorney General Letitia James for mortgage fraud.
But an indictment is a long way from a conviction. And according to one Boston University expert, the crime is seldom prosecuted and rarely results in prison for those who are successfully prosecuted.
In an analysis for the public policy site The Conversation, BU business professor Jay L. Zagorsky said he reviewed more than a decade’s worth of data to reach that conclusion.
Just 38 people in the country were sentenced for such crimes in 2024, and among that small group, four of the convicted got no prison time, Zagorsky wrote. The year before, in 2023, only 34 people were convicted and seven avoided prison.
Over the last 12 years, fewer than 3,000 people were convicted of federal mortgage fraud, and the number of people sentenced fell steadily each year, he wrote
Which isn’t to say the crime isn’t serious or doesn’t come with some heavy penalties.
The maximum federal sentence is 30 years, with fines of up to $1 million. Because more than a quarter of all mortgages are guaranteed by federal agencies, and many are acquired by quasi-government organizations like Freddie Mac and Fannie Mae, most mortgage fraud is a federal crime.
“However, just because there are laws on the books doesn’t mean they’re enforced,” he wrote. “For example, I work in Boston, where for years jaywalking has been illegal – but as any visitor quickly notices, no one pays any attention to this rule.”
And the 3,000 people who were convicted account for just a fraction of the mortgages that were written to purchase or to refinance a home during that same time period. That accounts for 0.003% of all mortgages.
Federal sentencing data also offers some insight into who does get convicted. In all cases, three-quarters were men in their late 40s, more than 90% were U.S. citizens, and most had an associate degree, Zagorsky found.
And of those who did get jail time, most served far less than the 30-year maximum prescribed by law, Zagorsky found. In 2024, the maximum sentence handed out was 10 years, according to his analysis..
And since 2013, 15% of those convicted got no jail time. The average sentence for people who did get jail time was 21 months, he wrote.
Fines also tend to come in far below the $1 million maximum penalty.
Last year, the maximum fine issued was $250,000, and since 2013, the average person convicted of mortgage fraud paid a fine of less than $6,000, while half paid no fine at all, Zagorsky found.
But that doesn’t mean there aren’t financial penalties that come with a conviction.
Courts require restitution in most cases. Last year, half of all those convicted had to pay at least $500,000 in restitution, he found. Over the 12 years included in his analysis, Zagorsky said he found that the average person paid $2 million in restitution.
“What is clear is that while millions of mortgages are written each year, only a tiny fraction of mortgage recipients go to jail for fraud,” he wrote.
“One way to put this tiny fraction into perspective is to compare it with the National Weather Service estimates of the approximately 270 people hit by lightning yearly. Last year, lightning hit over seven times more people than the federal government convicted of mortgage fraud,” he said.