Bill Text: NY S03781 | 2011-2012 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to unauthorized entities, unregistered mortgage brokers and mortgage fraud; establishes additional penalties against unlicensed or unregistered persons or entities engaging in activities after receiving a cease and desist notice; relates to the crime of mortgage fraud. [Track Bill]

Status: 2012-06-20 - referred to banks [S03781 Detail]

Download: New_York-2011-S03781-Amended.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        3781--A
                              2011-2012 Regular Sessions
                                   I N  S E N A T E
                                     March 3, 2011
                                      ___________
       Introduced  by  Sen.  SMITH  -- read twice and ordered printed, and when
         printed to be committed to the Committee on Banks  --  recommitted  to
         the  Committee  on  Banks  in accordance with Senate Rule 6, sec. 8 --
         committee discharged, bill amended, ordered reprinted as  amended  and
         recommitted to said committee
       AN  ACT to amend the banking law and the penal law, in relation to unau-
         thorized entities, unregistered mortgage brokers and mortgage fraud
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1. The banking law is amended by adding a new section 78-a to
    2  read as follows:
    3    S 78-A. UNAUTHORIZED  ENTITIES.  THE  CRIMINAL  INVESTIGATIONS  BUREAU
    4  SHALL  REFER ANY INSTANCES OF A PERSON, PARTNERSHIP, ASSOCIATION, CORPO-
    5  RATION OR OTHER ENTITY  WHICH  IS  OPERATING  WITHOUT  BEING  CHARTERED,
    6  LICENSED  OR  REGISTERED  AS REQUIRED UNDER THIS CHAPTER TO THE ATTORNEY
    7  GENERAL AND TO ANY OTHER FEDERAL, STATE OR LOCAL AGENCY  OR  ENTITY  FOR
    8  APPROPRIATE  ENFORCEMENT ACTION. AT LEAST EVERY SIX MONTHS, THE ATTORNEY
    9  GENERAL SHALL PROVIDE THE BUREAU WITH A WRITTEN UPDATE OF THE STATUS  OF
   10  ANY ENFORCEMENT ACTIONS IT HAS TAKEN AGAINST SUCH PERSONS OR ENTITIES.
   11    S  2.  Subdivision  5  of section 590 of the banking law is amended by
   12  adding a new paragraph (f) to read as follows:
   13    (F) NO MORTGAGE BANKER, MORTGAGE BROKER OR EXEMPT  ORGANIZATION  SHALL
   14  CONDUCT  BUSINESS WITH ANY PERSON, PARTNERSHIP, ASSOCIATION, CORPORATION
   15  OR OTHER ENTITY WHICH IT KNOWS OR SHOULD HAVE KNOWN IS ACTING AS A MORT-
   16  GAGE BANKER OR A MORTGAGE BROKER WITHOUT BEING LICENSED OR REGISTERED AS
   17  REQUIRED BY THIS ARTICLE. A MORTGAGE BANKER, MORTGAGE BROKER  OR  EXEMPT
   18  ORGANIZATION SHALL PROMPTLY NOTIFY THE DEPARTMENT OF ANY SUCH UNLICENSED
   19  OR UNREGISTERED OPERATIONS.
   20    S  3.  Subdivision  5  of  section 598 of the banking law, as added by
   21  chapter 571 of the laws of 1986, is amended to read as follows:
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD09855-02-2
       S. 3781--A                          2
    1    5. Civil  penalties  assessable  against  unlicensed  or  unregistered
    2  persons or entities. If any non-exempt unlicensed or unregistered person
    3  or entity engages in activities encompassed by this article, he shall be
    4  liable  to any person or entity affected by such activities for a sum of
    5  money of not less than the amount of money paid to an affected person or
    6  entity in connection with such activities, nor more than four times such
    7  sum; PROVIDED HOWEVER THAT WHERE A NON-EXEMPT UNLICENSED OR UNREGISTERED
    8  PERSON  HAS  CONTINUED  TO  ENGAGE IN SUCH UNAUTHORIZED ACTIVITIES AFTER
    9  RECEIVING A CEASE AND DESIST NOTICE FROM THE SUPERINTENDENT, THE MAXIMUM
   10  AMOUNT OF LIABILITY SHALL BE UP TO TEN TIMES SUCH SUM. Such sum  may  be
   11  sued  for  and recovered by any person or entity for his use and benefit
   12  in any court of competent jurisdiction.
   13    S 4.  The article heading of article 187 of the penal law, as added by
   14  chapter 472 of the laws of 2008, is amended to read as follows:
   15    [RESIDENTIAL] MORTGAGE FRAUD
   16    S 5. Section 187.00 of the penal law, as amended by chapter 507 of the
   17  laws of 2009, is amended to read as follows:
   18  S 187.00 Definitions.
   19    As used in this article:
   20    1. "Person" means any individual or entity.
   21    2. ["Residential mortgage] "MORTGAGE loan" means a loan  or  agreement
   22  to  extend credit, including the renewal, refinancing or modification of
   23  any such loan, made to a person OR AN ENTITY, which  loan  is  primarily
   24  secured  by  either  a  mortgage,  deed of trust, or other lien upon any
   25  interest in [residential] real property or any certificate of  stock  or
   26  other  evidence  of ownership in, and a proprietary lease from, a corpo-
   27  ration or partnership formed for the purpose of cooperative ownership of
   28  [residential] real property.
   29    3. ["Residential real property" means  real  property  improved  by  a
   30  one-to-four family dwelling, or a residential unit in a building includ-
   31  ing units owned as condominiums or on a cooperative basis, used or occu-
   32  pied,  or intended to be used or occupied, wholly or partly, as the home
   33  or residence of one or more persons, but shall not refer  to  unimproved
   34  real property upon which such dwellings are to be constructed.
   35    4.  "Residential  mortgage]  "MORTGAGE fraud" is committed by a person
   36  who, knowingly and with  intent  to  defraud,  presents,  causes  to  be
   37  presented,  or prepares with knowledge or belief that it will be used in
   38  soliciting an applicant for, applying for,  underwriting  or  closing  a
   39  [residential] mortgage loan, or filing with a county clerk of any county
   40  in  the  state  arising out of and related to the closing of a [residen-
   41  tial] mortgage loan, any written statement which:
   42    (a) contains materially false information concerning any fact material
   43  thereto; or
   44    (b) conceals, for the purpose of  misleading,  information  concerning
   45  any fact material thereto.
   46    S  6.  Section 187.05 of the penal law, as added by chapter 472 of the
   47  laws of 2008, is amended to read as follows:
   48  S 187.05 [Residential mortgage] MORTGAGE fraud in the fifth degree.
   49    A person is guilty of [residential] mortgage fraud in the fifth degree
   50  when he or she commits [residential] mortgage fraud.
   51    [Residential mortgage] MORTGAGE fraud in the fifth degree is a class A
   52  misdemeanor.
   53    S 7. Section 187.10 of the penal law, as added by chapter 472  of  the
   54  laws of 2008, is amended to read as follows:
   55  S 187.10 [Residential mortgage] MORTGAGE fraud in the fourth degree.
       S. 3781--A                          3
    1    A  person  is  guilty  of  [residential]  mortgage fraud in the fourth
    2  degree when he or she commits [residential] mortgage fraud  and  thereby
    3  receives  proceeds  or any other funds in the aggregate in excess of one
    4  thousand dollars.
    5    [Residential  mortgage] MORTGAGE fraud in the fourth degree is a class
    6  E felony.
    7    S 8. Section 187.15 of the penal law, as added by chapter 472  of  the
    8  laws of 2008, is amended to read as follows:
    9  S 187.15 [Residential mortgage] MORTGAGE fraud in the third degree.
   10    A person is guilty of [residential] mortgage fraud in the third degree
   11  when he or she commits [residential] mortgage fraud and thereby receives
   12  proceeds or any other funds in the aggregate in excess of three thousand
   13  dollars.
   14    [Residential mortgage] MORTGAGE fraud in the third degree is a class D
   15  felony.
   16    S  9.  Section 187.20 of the penal law, as added by chapter 472 of the
   17  laws of 2008, is amended to read as follows:
   18  S 187.20 [Residential mortgage] MORTGAGE fraud in the second degree.
   19    A person is guilty of  [residential]  mortgage  fraud  in  the  second
   20  degree  when  he or she commits [residential] mortgage fraud and thereby
   21  receives proceeds or any other funds in the aggregate in excess of fifty
   22  thousand dollars.
   23    [Residential mortgage] MORTGAGE fraud in the second degree is a  class
   24  C felony.
   25    S  10. Section 187.25 of the penal law, as added by chapter 472 of the
   26  laws of 2008, is amended to read as follows:
   27  S 187.25 [Residential mortgage] MORTGAGE fraud in the first degree.
   28    A person is guilty of [residential] mortgage fraud in the first degree
   29  when he or she commits [residential] mortgage fraud and thereby receives
   30  proceeds or any other funds in the aggregate in excess  of  one  million
   31  dollars.
   32    [Residential mortgage] MORTGAGE fraud in the first degree is a class B
   33  felony.
   34    S  11.  This act shall take effect on the thirtieth day after it shall
   35  have become a law.