S T A T E O F N E W Y O R K
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2586
2009-2010 Regular Sessions
I N A S S E M B L Y
January 21, 2009
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Introduced by M. of A. CLARK, BARRA -- Multi-Sponsored by -- M. of A.
ALFANO -- read once and referred to the Committee on Codes
AN ACT to amend the penal law, in relation to a scheme to defraud in
obtaining a credit loan secured by an interest in real property
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings. The legislature has found that many
senior citizens and minority homeowners in New York have been targeted
by unethical home improvement contractors and finance companies who are
selling them high interest and fraudulently obtained mortgages. In order
to entice senior and minority homeowners to take these loans, the
contractors and finance companies offer to refinance primary mortgages,
consolidate loans and outstanding bills, and give the mortgagor cash at
the loan's closing. In most instances the homeowner is unaware that he
or she is taking out a mortgage on his or her house and that a default
in payment will lead to a foreclosure. In addition, many of these senior
and minority homeowners live on a fixed income and are unable to make
any loan payments because the monthly payment exceeds his or her income.
The legislature further finds that unethical finance companies have
engaged in a pattern and practice of refinancing these mortgages, which
further decreases the senior and minority homeowners equity in his or
her home. These loans often contain exorbitant points, high interest
rates, and have monthly payments that exceed the homeowners income. In
most instances, senior and minority homeowners are unable to pay these
mortgages and lose their home to foreclosure.
The legislature further finds that communities that consist of predom-
inantly senior and minority homeowners have been specifically targeted
for this crime.
S 2. The penal law is amended by adding a new section 190.62 to read
as follows:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04970-01-9
A. 2586 2
S 190.62 SCHEME TO DEFRAUD A PERSON IN OBTAINING A CREDIT LOAN SECURED
BY AN INTEREST IN REAL PROPERTY.
A PERSON IS GUILTY OF A SCHEME TO DEFRAUD A PERSON IN OBTAINING A
CREDIT LOAN SECURED BY AN INTEREST IN REAL PROPERTY WHEN HE OR SHE
ENGAGES IN A SCHEME CONSTITUTING A SYSTEMATIC ONGOING COURSE OF CONDUCT
WITH INTENT TO DEFRAUD A PERSON BY OBTAINING A CREDIT LOAN SECURED BY A
MORTGAGE, LIEN, SECURITY INTEREST, OR ANY EQUITABLE OR LEGAL INTEREST IN
THAT PERSON'S REAL PROPERTY BY FAILING TO DISCLOSE TO SUCH PERSON THAT
THE LOAN IS SECURED BY A MORTGAGE, OR FAILING TO DISCLOSE TO SUCH PERSON
THE FULL TERMS AND IMPLICATIONS OF THE LOAN DOCUMENTS AND AGREEMENT.
SCHEME TO DEFRAUD A PERSON IN OBTAINING A CREDIT LOAN SECURED BY AN
INTEREST IN REAL PROPERTY SHALL BE A CLASS B FELONY IN INSTANCES WHERE
MORE THAN FIFTY THOUSAND DOLLARS IN EQUITY IS OBTAINED FROM THE TITLE-
HOLDER OF THE REAL PROPERTY.
SCHEME TO DEFRAUD A PERSON IN OBTAINING A CREDIT LOAN SECURED BY AN
INTEREST IN REAL PROPERTY SHALL BE A CLASS C FELONY IN INSTANCES WHERE
MORE THAN TWENTY THOUSAND DOLLARS IN EQUITY IS OBTAINED FROM THE TITLE-
HOLDER OF THE REAL PROPERTY.
SCHEME TO DEFRAUD A PERSON IN OBTAINING A CREDIT LOAN SECURED BY AN
INTEREST IN REAL PROPERTY SHALL BE A CLASS D FELONY IN INSTANCES WHERE
MORE THAN TEN THOUSAND DOLLARS IN EQUITY IS OBTAINED FROM THE TITLEHOLD-
ER OF THE REAL PROPERTY.
SCHEME TO DEFRAUD A PERSON IN OBTAINING A CREDIT LOAN SECURED BY AN
INTEREST IN REAL PROPERTY SHALL BE A CLASS E FELONY IN ALL OTHER
INSTANCES.
S 3. This act shall take effect on the first of November next succeed-
ing the date on which it shall have become a law.