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AN ACT
To amend Chapter 8 of
Title 16 of the Official Code of Georgia Annotated,
relating to offenses involving theft, so as to provide
for the "Georgia Residential Mortgage Fraud Act"; to
provide a short title; to provide for definitions; to
define the criminal offense of residential mortgage
fraud; to provide for venue; to provide penalties; to
authorize district attorneys and the Attorney General to
investigate and prosecute cases of residential mortgage
fraud; to provide for the forfeiture of real and
personal property; to amend Chapter 14 of Title 16 of
the Official Code of Georgia Annotated, the "Georgia
RICO (Racketeer Influenced and Corrupt Organizations)
Act," so as to include residential mortgage fraud within
the definition of racketeering activity; to provide for
findings and a statement of purpose; to provide for
related matters; to provide an effective date; to repeal
conflicting laws; and for other purposes.
BE IT ENACTED BY THE
GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
The General Assembly
finds and declares that fraud involving residential
mortgages is at an all-time high in the United States
and in Georgia. Mortgage lending institutions and
borrowers have suffered hundreds of millions of dollars
in losses due to residential mortgage fraud. Homeowners
in neighborhoods plagued by mortgage fraud have
witnessed the deterioration of their neighborhoods.
Fraudulently inflated property values in their
neighborhoods have resulted in substantial increases in
property taxes. The General Assembly therefore concludes
that for the protection of the general public, and
particularly for the protection of borrowers,
homeowners, lending institutions, and the integrity of
the mortgage lending process, the "Georgia Residential
Mortgage Fraud Act" shall be enacted.
SECTION 2.
Chapter 8 of Title 16 of
the Official Code of Georgia Annotated, relating to
offenses involving theft, is amended by adding a new
Article 5 to read as follows:
"ARTICLE
5
16-8-100.
This article shall be
known and may be cited as the 'Georgia Residential
Mortgage Fraud Act.'
16-8-101.
(1) '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. Documents involved in the mortgage lending
process include, but are not limited to, 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 required disclosures.
(2) 'Pattern of
residential mortgage fraud' means one or more
misstatements, misrepresentations, or omissions made
during the mortgage lending process that involve two or
more residential properties, which have the same or
similar intents, results, accomplices, victims, or
methods of commission or otherwise are interrelated by
distinguishing characteristics.
(3) 'Person' means a
natural person, corporation, company, limited liability
company, partnership, trustee, association, or any other
entity.
(4) 'Residential mortgage
loan' means a loan or agreement to extend credit made to
a person, which loan is secured by a deed to secure
debt, security deed, mortgage, security interest, deed
of trust, or other document representing a security
interest or lien upon any interest in one-to-four family
residential property located in Georgia including the
renewal or refinancing of any such loan.
16-8-102.
A person commits the
offense of residential mortgage fraud when, with the
intent to defraud, such person:
(1) Knowingly makes any
deliberate misstatement, misrepresentation, or omission
during the mortgage lending process with the intention
that it be relied on by a mortgage lender, borrower, or
any other party to the mortgage lending process;
(2) Knowingly uses or
facilitates the use of any deliberate misstatement,
misrepresentation, or omission, knowing the same to
contain a misstatement, misrepresentation, or omission,
during the mortgage lending process with the intention
that it be relied on by a mortgage lender, borrower, or
any other party to the mortgage lending process;
(3) Receives any proceeds
or any other funds in connection with a residential
mortgage closing that such person knew resulted from a
violation of paragraph (1) or (2) of this Code section;
(4) Conspires to violate
any of the provisions of paragraph (1), (2), or (3) of
this Code section; or
(5) Files or causes to be
filed with the official registrar of deeds of any county
of this state any document such person knows to contain
a deliberate misstatement, misrepresentation, or
omission.
An offense of residential
mortgage fraud shall not be predicated solely upon
information lawfully disclosed under federal disclosure
laws, regulations, and interpretations related to the
mortgage lending process.
16-8-103.
For the purpose of venue
under this article, any violation of this article shall
be considered to have been committed:
(1) In the county in
which the residential property for which a mortgage loan
is being sought is located;
(2) In any county in
which any act was performed in furtherance of the
violation;
(3) In any county in
which any person alleged to have violated this article
had control or possession of any proceeds of the
violation;
(4) If a closing
occurred, in any county in which the closing occurred;
or
(5) In any county in
which a document containing a deliberate misstatement,
misrepresentation, or omission is filed with the
official registrar of deeds.
16-8-104.
District attorneys and
the Attorney General shall have the authority to conduct
the criminal investigation and prosecution of all cases
of residential mortgage fraud under this article or
under any other provision of this title.
16-8-105.
(a) Any person violating
this article shall be guilty of a felony and, upon
conviction, shall be punished by imprisonment for not
less than one year nor more than ten years, by a fine
not to exceed $5,000.00, or both.
(b) If a violation of
this article involves engaging or participating in a
pattern of residential mortgage fraud or a conspiracy or
endeavor to engage or participate in a pattern of
residential mortgage fraud, said violation shall be
punishable by imprisonment for not less than three years
nor more than 20 years, by a fine not to exceed
$100,000.00, or both.
(c) Each residential
property transaction subject to a violation of this
article shall constitute a separate offense and shall
not merge with any other crimes set forth in this title.
16-8-106.
All real and personal
property of every kind used or intended for use in the
course of, derived from, or realized through a violation
of this article shall be subject to forfeiture to the
state. Forfeiture shall be had by the same procedure set
forth in Code Section 16-14-7. District attorneys and
the Attorney General may commence forfeiture proceedings
under this article."
SECTION 3.
Chapter 14 of Title 16 of
the Official Code of Georgia Annotated, the "Georgia
RICO (Racketeer Influenced and Corrupt Organizations)
Act," is amended by striking divisions (9)(A)(xxxvii)
and (9)(A)(xxxviii) of Code Section 16-14-3, relating to
definitions of terms relating to racketeering activity,
in their entirety and inserting in lieu thereof the
following:
"(xxxvii)
Code Section 33-1-9, relating to insurance fraud;
(xxxviii) Code Section
16-17-2, relating to payday loans; or
(xxxix) Code Section
16-8-102, relating to residential mortgage fraud."
SECTION 4.
This Act shall become
effective upon its approval by the Governor or upon its
becoming law without such approval.
SECTION 5.
All laws and parts of
laws in conflict with this Act are repealed.
SB100
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