The most recent statistics from the FBI show that Michigan is one of the top 10 states for mortgage fraud.
Governor Rick Snyder signed legislation to protect homeowners today.
“Tougher penalties are needed to protect against scammers who think nothing of bilking unsuspecting homeowners and lenders out of tens of thousands of dollars,” Snyder said. “This legislation makes it clear – mortgage fraud will not be tolerated. Try to steal someone’s house, go to prison.”
Although prosecutors currently have the ability to go after perpetrators of mortgage fraud based on elements of the activity that are already illegal, mortgage fraud itself is not considered a separate crime. This means prosecutors are often forced to go after offenders for lesser crimes such as forgery, but those penalties are considered weak and, because of the complexity involved and time it can take to discover that fraud occurred, cases are often hard to prosecute.
Specifically criminalizing mortgage fraud will give prosecutors the tools they need to better protect homeowners and lenders by making mortgage fraud a felony carrying stiff penalties of up to 20 years in prison and a maximum fine of $500,000. Conviction may also result in forfeiture of property used in connection with a mortgage fraud scam.
One of the most important consumer protection aspects of the new laws is a provision that allows the courts to invalidate fraudulent mortgage documents, which the governor said will ensure mortgage fraud victims are not held liable for criminal activity.