FROM:
Amy Cornell, Public Information Officer
(408) 792-2997   CONTACT PERSON:
Mike Fitzsimmons, Deputy District Attorney
(408) 792-2801   For release on August 24, 2009   STATE ASSEMBLY APPROVES MORTGAGE FRAUD LEGISLATION WRITTEN BY SANTA CLARA COUNTY DISTRICT ATTORNEY’S OFFICE   The California State Assembly approved legislation by a 76-0 vote last week, originally written by the Santa Clara County District Attorney’s Office, which would establish California’s first stand alone mortgage fraud law treating the crime as a felony. Earlier, the California State Senate approved the measure, SB 239 (Pavley), by a vote of 39-0.   If approved by the Governor, the legislation would make it a felony for any person to knowingly make or use any deliberate misstatement 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 lending process. Upon conviction, violators could be subject to a maximum penalty of three years in state prison and a fine of up to $10,000. Currently, California’s only dedicated mortgage fraud law makes the crime a misdemeanor.  Other states which have recently adopted dedicated felony mortgage fraud statutes with similar wording include Georgia, Arizona, Nevada, North Carolina and Florida. SB 239 also facilitates speedier investigation of mortgage fraud allegations by allowing investigators to obtain transaction related documents via court order.   The bill was created in response to the explosion of mortgage fraud schemes that have contributed to the demise of our economy and made California one of the leading states in the incidence of mortgage fraud. Nationally, reports of mortgage fraud have risen by more than 1,400% from 2000 to 2008.   Santa Clara County District Attorney Dolores Carr states “Mortgage fraud is one of the linchpins in the demise of the California real estate market and the related crises in the financial sectors. It is critical that something is done to assist law enforcement in handling the flood of mortgage fraud offenses that we continue to receive.”   SB 239 is authored by Senator Fran Pavley (D – Santa Monica) and sponsored by the California District Attorneys Association, with support from the District Attorney’s Offices of San Francisco and Los Angeles and the Consumers Union.

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