Relates to residential mortgage foreclosure fraud prevention; creates the crimes of residential mortgage foreclosure fraud in the first and second degrees.
STATE OF NEW YORK
________________________________________________________________________
3491
2013-2014 Regular Sessions
IN SENATE
February 4, 2013
___________
Introduced by Sen. ESPAILLAT -- read twice and ordered printed, and when
printed to be committed to the Committee on Codes
AN ACT to amend the penal law, in relation to residential mortgage fore-
closure fraud prevention
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 187.00 of the penal law is amended by adding seven
2 new subdivisions 5, 6, 7, 8, 9, 10 and 11 to read as follows:
3 5. "Residential mortgage foreclosure fraud" is committed by a person
4 who, being an agent of a residential mortgage business acting within the
5 scope of his or her employment, intentionally engages in fraud or decep-
6 tion by authorizing, preparing, executing, offering or presenting for
7 filing any written instrument which such person:
8 (a) knows contains a material false statement, material false informa-
9 tion or a material omission; and
10 (b) knows or believes will be filed with a court or other public
11 office or public servant, including but not limited to a federal, state
12 or local agency, department or bureau, in support of or in conjunction
13 with a pending or prospective residential mortgage foreclosure action.
14 6. "Agent" shall have the same meaning as provided in paragraph (a) of
15 subdivision one of section 20.20 of this chapter.
16 7. "High managerial agent" shall have the same meaning as provided in
17 paragraph (b) of subdivision one of section 20.20 of this chapter.
18 8. "Written instrument" shall have the same meaning as provided in
19 subdivision three of section 175.00 of this part.
20 9. "Residential mortgage business" means a lender or any other part-
21 nership, corporation, company, trust or association engaged in whole or
22 in part in the business of originating, granting, servicing or foreclos-
23 ing upon residential mortgage loans.
24 10. "Lender" means a mortgage banker as defined in paragraph (f) of
25 subdivision one of section five hundred ninety of the banking law or an
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08494-01-3
S. 3491 2
1 exempt organization as defined in paragraph (e) of subdivision one of
2 section five hundred ninety of the banking law.
3 11. "Residential mortgage foreclosure action" means an action brought
4 pursuant to the real property actions and proceedings law to foreclose
5 upon a residential mortgage loan.
6 § 2. The penal law is amended by adding two new sections 187.30 and
7 187.35 to read as follows:
8 § 187.30 Residential mortgage foreclosure fraud in the second degree.
9 A person is guilty of residential mortgage foreclosure fraud in the
10 second degree when he or she commits residential mortgage foreclosure
11 fraud.
12 Residential mortgage foreclosure fraud in the second degree is a class
13 A misdemeanor.
14 § 187.35 Residential mortgage foreclosure fraud in the first degree.
15 A person is guilty of residential mortgage foreclosure fraud in the
16 first degree when:
17 1. as part of a systematic ongoing course of conduct, such person
18 engages in the conduct prohibited by section 187.30 of this article with
19 respect to five or more pending or prospective residential mortgage
20 foreclosure actions within a one-year period; or
21 2. being a high managerial agent of a residential mortgage business,
22 he or she:
23 (a) knows that one or more agents of such business are engaged in the
24 conduct prohibited by subdivision one of this section; and
25 (b) fails to take reasonable measures to prevent such conduct from
26 continuing.
27 Residential mortgage foreclosure fraud in the first degree is a class
28 E felony.
29 § 3. This act shall take effect on the one hundred twentieth day after
30 it shall have become a law.
