In a push before the end of session next week, Attorney General Eric Schneiderman introduced legislation today to crack down on fraudulent mortgage practices, such as “robosigning” of loans.
The attorney general, who co-chairs President Obama’s mortgage task force, introduced the Foreclosure Fraud Prevention Act of 2012. He said the bill would define “residential mortgage foreclosure fraud” and impose criminal penalties, including jail for violators.
“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 in a statement.
Schneiderman has been a leading voice in the country for greater oversight of the mortgage industry. He pushed the White House last year to not settle with the major banks over mortgage abuse, leading to a larger settlement deal in February.
Schneiderman said the bill has an Assembly sponsor in Assemblywoman Helene Weinstein D-Brooklyn, but he didn’t mention a sponsor in the Senate — where Schneiderman was a member.
The bill would foreclosure abuse a Class A misdemeanor, punishable by up to a year in jail and a $1,000 fine. It would target “an employee or agent of a residential mortgage business” who knowingly authorized, prepared, executed or offered to file false documents in a pending or prospective residential foreclosure action, Schneiderman said.
The bill would make it a E felony, punishable by up to four years in state prison, multiple acts of foreclosure fraud and also makes it a class E felony for a “high managerial agent” of a residential mortgage business to “recklessly tolerate such fraudulent conduct by his or her agents or employees.”