ALBANY - Eric T. Schneiderman, state attorney general, recently introduced a bill in the state Legislature that would protect New Yorkers from fraudulent business practices like "robosigning" in the foreclosure process.
The attorney general's legislation, the Foreclosure Fraud Prevention Act of 2012, will define "residential mortgage foreclosure fraud," and impose tough new criminal penalties that include jail time for those who intentionally engage in such conduct, including managers of residential mortgage businesses who knowingly tolerate fraudulent foreclosure practices committed by their employees and agents.
"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," said Schneiderman. "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."
Schneiderman's legislation, sponsored by Assemblymember Helene Weinstein, D-Brooklyn, makes it a Class A misdemeanor, punishable by up to a year in jail and a $1,000 fine, 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. The bill makes it a class E felony, punishable by up to four years in state prison, for such employees to engage in 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.
"The best way to prevent wrongful foreclosures is with accountability," Weinstein said. "Moving forward, fraud will no longer be tolerated in New York. This bill sends that message loud and clear: if you break the law to take someone's home, you will go to jail."