Business

Supreme Court clarifies rules for restitution in a case of mortgage fraud

WASHINGTON — The Supreme Court has clarified how restitution must be computed in mortgage fraud cases.

The justices in a unanimous decision on Monday said that restitution to a bank that has been defrauded must be calculated based on the value of property when it is actually sold, and not the earlier date on which the bank forecloses on the property.

Advertisement

The case involved a fraudulent loan application for the purchase of two houses in Wisconsin for $470,000. The two banks foreclosed on the mortgages in 2006, but sold the homes later for $280,000 after the housing market collapsed.

The high court ruled that the amount of restitution is offset by the sale price the banks received, and not the higher price they were worth when the banks foreclosed.

Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
We hope you've enjoyed your free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com