That would be fellony fraud. Definitely criminal.
Might well be federal rap if there is any federal money involved (like a VA or FHA loan) or if it involved people in one or more states (if the bank that financed the loan was in a different state).
There would be wire fraud charges (if a phone was ever used) and mail fraud (ALWAYS A FEDERAL RAP) if the mails were used at any time, not to mention conspiracy.
Don't know the specifics but for a ball park figure you can go by this.
Conspiracy (18 U.S.C. § 371): Maximum punishment of 5 years’ imprisonment, a fine of $250,000, and three years supervised release.
Mail Fraud (18 U.S.C. § 1341): Maximum punishment of 20 years’ imprisonment, a fine of $250,000, and three years supervised release.
Wire Fraud (18 U.S.C. § 1343): Maximum punishment of 20 years’ imprisonment, a fine of $250,00, and three years supervised release.
Bank Fraud (18 U.S.C. § 1344): Maximum punishment of 20 years’ imprisonment, a fine of $250,000 and three years supervised release
The real kicker is the the sentencing guidelines for this sort of thing go by how much money was stolen... so if you are talking about a house...probably a quarter of a million minimum was taken I'd guess... that's pretty high up the charts.
Just to make it fun... that "time off for good behavior" stuff you hear about on TV...that doesn't apply to Federal crimes. State's do that. You can get between one third to one half of your sentence knocked off for good behavior in a state prison, but Federal sentences are "day for day". You get put in for 20 years, you do 20 years. Not 19 years 364 days, but 20 years. On the good side, unless you REALLY annoy the judge you get to serve all the sentences at the same time ("concurrently") not one after the other ("consecutively") so in the above example you would only get 20 years, not 65.
If the prosecutor is willing to deal, the first one that offers to rollsover and testifies against the other is going to get the easy sentence. The other one will get the max.