PROVIDENCE – The R.I. General Assembly last week approved legislation establishing a criminal offense for residential-mortgage fraud.
The bill, backed by R.I. Attorney General Peter F. Kilmartin, makes residential-mortgage fraud a felony. Guilty offenders face imprisonment up to 10 years, a fine of $10,000, or both.
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“Residential-mortgage fraud is when a person knowingly makes an omission or misrepresentation of a fact with the deliberate intention that will be relied on in the mortgage-lending process; receives proceeds in connection with a fraudulent transaction; conspires with another to engage in acts of residential-mortgage fraud; or files a document that is known to be a misstatement,” according to the Attorney General’s Office.
The legislation is based on Georgia law, and Rhode Island would join more than 20 other states that have enacted similar legislation, according to the press release.
“Rhode Island was among the hardest hit when the housing bubble burst, leaving tens of thousands of homeowners unable to pay their mortgages, and nearly driving our economy off a cliff. Everyone – bankers, mortgage service providers and individuals applying for mortgages – played it fast and loose, often providing false information about the ability of those applying for a mortgage to afford the payments with the promise of a quick commission and with the expectation the market would continue to go up,” Kilmartin said in a statement. “With this act, we have put important measures and penalties in place for such reckless and criminal behavior and will ensure Rhode Island is not as vulnerable to another housing downturn.”
The bill now goes to Gov. Gina M. Raimondo’s desk for her signature, veto or approval without action.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter at @Eli_Sherman.
