Robosigning is Focus of New York Fraud Legislation

The New York State Assembly will soon consider
a bill that, if passed, would broaden the definition of mortgage foreclosure
fraud to include “robosigning”
and enact tough new criminal penalties including
jail time for violators.  The introduction
of the Foreclosure Fraud Prevention Act of 2012 was announced today by New York
Attorney General Eric T. Schneiderman.

The bill, sponsored by Assemblywoman
Helene Weinstein of Brooklyn, makes it a Class 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 pending or prospective
residential foreclosure action.”   A violation is punishable by up to a year in
jail and a $1,000 fine.

The bill makes it a class E felony for
the same employees to engage in multiple acts of foreclosure fraud
(robosigning) and for a “high managerial agent” of a residential mortgage
business to “recklessly tolerate” such conduct on the part of any agent or
employee.  Such a felony carries a
penalty of up to four years in state prison.

“For many middle class New Yorkers,
their life savings is in their home. To take away people’s homes under
fraudulent circumstances is a crime deserving of jail time,” Schneiderman said.  “By treating foreclosure fraud as the serious
crime that it is, we can deter future abuse and spare untold numbers of
families the trauma of wrongful foreclosure. This legislation will ensure that
employees involved in these fraudulent and abusive practices, and their supervisors
who allow the misconduct to continue, will be held accountable for their
crimes.”

…(read more)

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