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New York Assembly Passes Foreclosure Fraud Justice Bill

New York Attorney General Eric Schneiderman's proposed ""Foreclosure Fraud Prevention Act of 2012"" passed in the state Assembly, the ""Office of the Attorney General"":http://www.ag.ny.gov/ announced Thursday.


Schneiderman ""introduced the legislation"":http://dsnews.comarticles/new-york-ag-introduces-bill-to-punish-fraudulent-foreclosures-2012-06-14 as part of an effort to protect homeowners from foreclosure and crack down on fraudulent business practices. The Foreclosure Fraud Prevention Act defines ""residential mortgage foreclosure fraud"" and imposes criminal penalties-including jail time-for employees who engage in fraudulent conduct (like knowingly authorizing, preparing, executing, or filing false documents in a foreclosure action) or managers who knowingly tolerate such behavior.


Under the legislation, employees who commit a fraudulent act in a residential foreclosure action could face class A misdemeanor charges, punishable by a $1,000 fine and up to a year in jail. Employees who engaged in multiple acts of foreclosure fraud (such as robosigning) may face class E felony charges, which may get them up to five years in prison. Managers of residential mortgage businesses who know about their employees' fraudulent practices and who allow it to continue could also see class E felony charges.

Assembly Speaker ""Sheldon Silver"":http://assembly.state.ny.us/mem/?ad=064 praised the bill.

""Throughout the state, many working families have invested their hard work and their hard-earned money in their homes,"" said Silver. ""Hardworking families who have been victims of the recession should not be taken advantage of by banks or lenders. Through the approval of this important bill, we will begin to restore many of our neighborhoods which have been devastated by the mortgage foreclosure crisis, and we will ensure that families can remain in their communities.""

""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,"" said Schneiderman. ""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.""

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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