The Arithmetic of Justice: Calculating Restitution for Mortgage Fraud
By: T. Dietrich Hill
The Mandatory Victims Restitution Act requires restitution for federal crimes involving property. In particular, the defendant is required to return any property taken, or, if return is impossible, to pay for the victim’s loss, which may be offset by a partial return of the property. In mortgage fraud cases, this usually entails calculating the lender’s loss— an unpaid loan—and offsetting that loss by the value of the collateral for the loan, which the lender recovers. The circuits disagree about how to value the recovered collateral as an offset to restitution: Should its value be determined by its appraised fair market value or, conversely, by its final foreclosure price when the victim-lender sells it? This Note concludes that courts should presumptively use the foreclosure price, except when that price can be shown not to approximate the value at the date of return.
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