A growing number of states are seeking legislation that imposes criminal penalties and jail time for those who engage in foreclosure fraud. In the latest state, New York, the Foreclosure Fraud Prevention Act of 2012, is making its way through the legislature — a bill that clearly defines “residential mortgage foreclosure fraud,” and imposes new criminal penalties for those who intentionally engage in such conduct.
Proposed by Attorney General Eric Schneiderman, the Act would make it a misdemeanor for an employee or agent of a residential mortgage business to knowingly authorize, prepare, execute or offer for filing false documents in a residential foreclosure action, punishable by up to one year in jail and a $1,000 fine. It would also make it a felony for employees to engage in multiple acts of foreclosure fraud, and for managerial personnel who knowingly tolerate such fraudulent conduct by employees, punishable by up to four years in state prison.
This legislation, which was passed in the Assembly and is now under review in the Senate, would help protect homeowners from fraudulent foreclosures and hold companies, managers and Notary employees accountable for their individual actions.