2006 Mortgage Fraud Legislation
Last Updated: December 7, 2007
Enactments are noted in italics
NCSL Staff Contact: Heather Morton, (303) 364-7700, Denver
| State: |
Bill Summary: |
| Arizona |
H.B. 2081
Signed by governor 4/17/06, Chapter 122
Prohibits the referencing of a lender’s trade name, trade mark, or a loan number, loan amount or other specific loan information for solicitation without the authorization of the lender and reserves the right of the violated party to take action in the form of an injunction. The prohibition does not apply to communications by a lender or its affiliates with a current customer or a person who was a customer within eighteen months immediately preceding the solicitation. |
| California |
S.B. 1477
States the intent of the Legislature to enact legislation to address the problems associated with absentee landlords, including mortgage fraud and more effective enforcement of contracts requiring owners occupy their houses. |
| Colorado |
H.B. 1323
Signed by governor 5/30/06, Chapter 290
Imposes a mandatory minimum fine in an amount equal to the amount of pecuniary harm incurred from residential mortgage fraud. Prohibits a court from accepting a plea bargain unless it includes an order of restitution to the victim. Grants the attorney general concurrent jurisdiction with the district attorneys to prosecute mortgage fraud. Recognizes a cause of action for theft by deception in the mortgage lending process. Exempts a bona fide purchaser of a mortgage contract from such cause of action. Authorizes any state agency to receive and apply to the United States government for grants to lower the incidence of mortgage fraud in Colorado. |
| Michigan |
H.B. 6432
Passed House 9/19/06
Amends §159(g) of the Michigan Penal Code (MCL 750.159g) to provide that a person who, with the intent to defraud, does any of the following during the mortgage lending process would be guilty of the crime of residential mortgage fraud: a) Knowingly makes any deliberate material misstatement, misrepresentation, or omission. b) Knowingly uses or facilitates the use of any deliberate material misstatement, misrepresentation, or omission knowing that it contains a misstatement, misrepresentation or omission. c) Receives any proceeds or any other money in connection with a residential mortgage closing that the person knew resulted from a violation described in the previous two paragraphs. d) Conspires to violate any of the provisions of the previous three paragraphs. e) Files or causes to be filed with the register of deeds of any county any document the person knows to contain a deliberate material misstatement, misrepresentation, or omission. For the purpose of determining venue, a violation of this section would be considered to have been committed in any of the following: (a) in the county in which the residential property for which the mortgage loan obtained or sought is located; (b) in any county in which any act was performed in furtherance of the violation; (c) in any county in which any person alleged to have violated the section had control or possession of any proceeds of the violation; (d) if a loan closing occurred, in the county in which the closing occurred; (e) in any county in which a document containing a deliberate material misstatement, misrepresentation, or omission is filed or recorded with the register of deeds. A violation would be a felony punishable by imprisonment for not more than ten years and/or a fine of up to $50,000. However, a violation that involved engaging or participating in a pattern of residential mortgage fraud, or a conspiracy or endeavor to engage in or participate in a pattern of residential mortgage fraud, would be punishable by imprisonment for not more than 20 years and/or a fine of up to $100,000. |
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H.B. 6433
Passed House 9/19/06
Amends Chapter XVII of the Code of Criminal Procedure (MCL 777.16l) to provide that residential mortgage fraud would be a Class D felony against the public order with a maximum sentence of 10 years. Engaging in or conspiring to engage in a pattern of residential mortgage fraud would be a class B felony against the public order with a maximum sentence of 20 years. |
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H.B. 6436
Passed House 9/19/06
Amends the Michigan Consumer Protection Act (MCL 445.903) to add committing residential mortgage fraud to the list of unfair, unconscionable, or deceptive acts or practices in the conduct of trade or commerce. |
| New Jersey |
S.B. 456
Creates the crime of residential mortgage fraud. This bill provides that a person who commits the offense of residential mortgage fraud is guilty of a crime of the third degree and subject to imprisonment for a term of three to five years and to a fine not to exceed $15,000, or both. The bill also provides that a person who engages in a pattern of mortgage fraud is guilty of a crime of the second degree and subject to imprisonment for a term of five to 10 years and to a fine not to exceed $150,000, or both. Each residential property transaction subject to the act shall constitute a separate offense and shall not merge with other crimes. In addition, where an assignment judge determines that the infraction is de minimus, the assignment judge may dismiss the prosecution of mortgage fraud. In order to facilitate uniform enforcement, the bill directs the attorney general to develop prosecution guidelines for dissemination to each of the county prosecutors within 180 days of the effective date of the act. |
| North Carolina |
H.B. 2112
Appropriates funds to the Department of Justice to fund positions for enforcement of mortgage fraud cases, as recommended by the House Select Committee on Home Foreclosures. |
| Oklahoma |
S.B. 1865
Creates the Oklahoma Residential Mortgage Fraud Act. |
| Pennsylvania |
H.B. 2970
Provides a remedy for misrepresentation as to occupation by mortgagors of residential property. |
| Washington |
H.B. 2338
Signed by governor 3/9/06, Chapter 21
S.B. 6167
Extends the mortgage lending fraud prosecution account to June 30, 2011. |
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