S T A T E O F N E W Y O R K
________________________________________________________________________
7395
2013-2014 Regular Sessions
I N A S S E M B L Y
May 14, 2013
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Introduced by M. of A. WEINSTEIN -- (at request of the Department of
Law) -- read once and referred to the Committee on Codes
AN ACT to amend the penal law, in relation to enacting the "foreclosure
fraud prevention act of 2013"
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known and may be cited as the "foreclo-
sure fraud prevention act of 2013."
S 2. Section 187.00 of the penal law is amended by adding seven new
subdivisions 5, 6, 7, 8, 9, 10 and 11 to read as follows:
5. "RESIDENTIAL MORTGAGE FORECLOSURE FRAUD" IS COMMITTED BY A PERSON
WHO, BEING AN AGENT OF A RESIDENTIAL MORTGAGE BUSINESS ACTING WITHIN THE
SCOPE OF HIS OR HER EMPLOYMENT, INTENTIONALLY ENGAGES IN FRAUD OR DECEP-
TION BY AUTHORIZING, PREPARING, EXECUTING, OFFERING OR PRESENTING FOR
FILING ANY WRITTEN INSTRUMENT WHICH SUCH PERSON:
(A) KNOWS CONTAINS A MATERIAL FALSE STATEMENT, MATERIAL FALSE INFORMA-
TION OR A MATERIAL OMISSION; AND
(B) KNOWS OR BELIEVES WILL BE FILED WITH A COURT OR OTHER PUBLIC
OFFICE OR PUBLIC SERVANT, INCLUDING BUT NOT LIMITED TO A FEDERAL, STATE
OR LOCAL AGENCY, DEPARTMENT OR BUREAU, IN SUPPORT OF OR IN CONJUNCTION
WITH A PENDING OR PROSPECTIVE RESIDENTIAL MORTGAGE FORECLOSURE ACTION.
6. "AGENT" SHALL HAVE THE SAME MEANING AS PROVIDED IN PARAGRAPH (A) OF
SUBDIVISION ONE OF SECTION 20.20 OF THIS CHAPTER.
7. "HIGH MANAGERIAL AGENT" SHALL HAVE THE SAME MEANING AS PROVIDED IN
PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION 20.20 OF THIS CHAPTER.
8. "WRITTEN INSTRUMENT" SHALL HAVE THE SAME MEANING AS PROVIDED IN
SUBDIVISION THREE OF SECTION 175.00 OF THIS TITLE.
9. "RESIDENTIAL MORTGAGE BUSINESS" MEANS A LENDER OR ANY OTHER PART-
NERSHIP, CORPORATION, COMPANY, TRUST OR ASSOCIATION ENGAGED IN WHOLE OR
IN PART IN THE BUSINESS OF ORIGINATING, GRANTING, SERVICING OR FORECLOS-
ING UPON RESIDENTIAL MORTGAGE LOANS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10511-01-3
A. 7395 2
10. "LENDER" MEANS A MORTGAGE BANKER AS DEFINED IN PARAGRAPH (F) OF
SUBDIVISION ONE OF SECTION FIVE HUNDRED NINETY OF THE BANKING LAW OR AN
EXEMPT ORGANIZATION AS DEFINED IN PARAGRAPH (E) OF SUBDIVISION ONE OF
SECTION FIVE HUNDRED NINETY OF THE BANKING LAW.
11. "RESIDENTIAL MORTGAGE FORECLOSURE ACTION" MEANS AN ACTION BROUGHT
PURSUANT TO THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW TO FORECLOSE
UPON A RESIDENTIAL MORTGAGE LOAN.
S 3. The penal law is amended by adding two new sections 187.30 and
187.35 to read as follows:
S 187.30 RESIDENTIAL MORTGAGE FORECLOSURE FRAUD IN THE SECOND DEGREE.
A PERSON IS GUILTY OF RESIDENTIAL MORTGAGE FORECLOSURE FRAUD IN THE
SECOND DEGREE WHEN HE OR SHE COMMITS RESIDENTIAL MORTGAGE FORECLOSURE
FRAUD.
RESIDENTIAL MORTGAGE FORECLOSURE FRAUD IN THE SECOND DEGREE IS A CLASS
A MISDEMEANOR.
S 187.35 RESIDENTIAL MORTGAGE FORECLOSURE FRAUD IN THE FIRST DEGREE.
A PERSON IS GUILTY OF RESIDENTIAL MORTGAGE FORECLOSURE FRAUD IN THE
FIRST DEGREE WHEN:
1. AS PART OF A SYSTEMATIC ONGOING COURSE OF CONDUCT, SUCH PERSON
ENGAGES IN THE CONDUCT PROHIBITED BY SECTION 187.30 OF THIS ARTICLE WITH
RESPECT TO FIVE OR MORE PENDING OR PROSPECTIVE RESIDENTIAL MORTGAGE
FORECLOSURE ACTIONS WITHIN A ONE-YEAR PERIOD; OR
2. BEING A HIGH MANAGERIAL AGENT OF A RESIDENTIAL MORTGAGE BUSINESS,
HE OR SHE:
(A) KNOWS THAT ONE OR MORE AGENTS OF SUCH BUSINESS ARE ENGAGED IN THE
CONDUCT PROHIBITED BY SUBDIVISION ONE OF THIS SECTION; AND
(B) FAILS TO TAKE REASONABLE MEASURES TO PREVENT SUCH CONDUCT FROM
CONTINUING.
RESIDENTIAL MORTGAGE FORECLOSURE FRAUD IN THE FIRST DEGREE IS A CLASS
E FELONY.
S 4. This act shall take effect on the ninetieth day after it shall
have become a law.