Mortgage Fraud a Felony Under New Law

STATE CAPITOL, PHOENIX A new law makes residential mortgage fraud a felony punishable by up to ten years in prison. The Legislature overwhelmingly passed and the governor signed the legislation that prosecutors say will make it easier to convict predators and scam artists within the real estate and mortgage business. "Arizona is one of the fastest growing states in the country with the construction and housing industry being a key component of our economy. As these industries grow, unfortunately so does the opportunity for fraud," said the bill's sponsor, Sen. Jay Tibshraeny, R-Chandler. "I have been working with the Department of Financial Institutions to craft a bill that will protect the public from schemes that would harm the stability of the housing market and ultimately our economy." The law makes residential mortgage fraud a Class 4 felony punishable by 1 ½ to three years in prison. Demonstrating a pattern of fraudulent behavior is a Class 2 felony punishable by four to 10 years in prison. Examples of residential mortgage fraud include knowingly using inflated appraisals and false income qualifications, directing homebuyers to certain lenders and artificially setting up loans to produce proceeds for the buyer or agents involved.