Bill Text: MI SB0043 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Consumer credit; lending practices; crime of residential mortgage fraud; establish. Amends 1931 PA 328 (MCL 750.1 - 750.568) by adding sec. 219d.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2011-10-25 - Assigned Pa 0205'11 With Immediate Effect [SB0043 Detail]
Download: Michigan-2011-SB0043-Introduced.html
SENATE BILL No. 43
January 19, 2011, Introduced by Senator HUNTER and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1931 PA 328, entitled
"The Michigan penal code,"
(MCL 750.1 to 750.568) by adding section 219d.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 219d. (1) A person that knowingly, with the intent to
defraud, does any of the following is guilty of the crime of
residential mortgage fraud, punishable as provided in this section:
(a) Makes a false statement or misrepresentation concerning a
material fact or deliberately conceals or fails to disclose a
material fact during the mortgage lending process.
(b) Uses or facilitates the use of a false statement or
misrepresentation made by another person concerning a material fact
or deliberately uses or facilitates the use of another person's
concealment or failure to disclose a material fact during the
mortgage lending process.
(c) Receives or attempts to receive any proceeds or any other
money in connection with the mortgage lending process that the
person knew resulted from a violation of subdivision (a) or (b).
(d) Files or causes to be filed with the register of deeds of
any county of this state any document involved in the mortgage
lending process that the person knows to contain a deliberate
material misstatement, misrepresentation, or omission.
(e) Fails to disburse funds in accordance with a loan
commitment made in connection with the mortgage lending process.
(f) Conspires to violate subdivision (a), (b), (c), (d), or
(e).
(2) A crime of residential mortgage fraud under this section
shall not be predicated solely upon information lawfully disclosed
under federal disclosure laws, regulations, or interpretations
related to the mortgage lending process.
(3) For the purpose of determining venue of a prosecution
under this section, a violation of this section is considered to
have been committed in any of the following:
(a) In the county in which the residential property for which
the mortgage loan is obtained or sought is located.
(b) In the county in which an owner of the property for which
the mortgage loan was obtained or sought resides.
(c) In any county in which a material act was performed in
furtherance of the violation.
(4) A person who violates this section is guilty of a felony
punishable by 1 of the following:
(a) Except for a violation described in subdivision (b),
imprisonment for not more than 15 years or a fine of not more than
$100,000.00, or both.
(b) If the violation occurs in connection with the mortgage
lending process in which the loan value stated on documents used in
the mortgage lending process exceeds $100,000.00, imprisonment for
not more than 20 years or a fine of not more than $500,000.00, or
both.
(5) Each violation of this section constitutes a separate
offense.
(6) This section does not prohibit a person from being charged
with, convicted of, or punished for any other violation of law that
is committed by that person while violating this section.
(7) Property of any kind used or intended for use in the
course of, derived from, or received in connection with a violation
of this section by the person that violated this section is subject
to forfeiture in the same manner as provided in chapter 47 of the
revised judicature act of 1961, 1961 PA 236, MCL 600.4701 to
600.4709.
(8) If a lender or any agent of the lender is convicted of a
violation of this section, the borrower in the mortgage lending
transaction with regard to which the violation was committed may
rescind the transaction within 6 months after the date of the
conviction if the borrower gives written notice to the lender and
records that notice with the register of deeds of the county in
which the mortgage was recorded.
(9) As used in this section:
(a) "Documents involved in the mortgage lending process"
includes, but is not limited to, mortgages; deeds; surveys;
inspection reports; uniform residential loan applications or other
loan applications; appraisal reports; HUD-1 settlement statements;
supporting personal documentation for loan applications such as W-2
forms, verifications of income and employment, bank statements, tax
returns, and payroll stubs; and any written disclosures required by
law.
(b) "Mortgage lending process" means the process through which
a person seeks or obtains a residential mortgage loan, including,
but not limited to, solicitation, application, or origination,
negotiation of terms, third-party provider services, underwriting,
signing and closing, and funding of the loan.
(c) "Person" means an individual, corporation, limited
liability company, partnership, trustee, association, or other
legal entity.
(d) "Residential mortgage loan" means a loan or agreement to
extend credit made to a person that is secured by a mortgage,
security interest, or other document representing a security
interest or lien on any interest in a 1-family to 4-family dwelling
located in this state. The term includes a renewal, extension, or
refinancing of a residential mortgage loan.
