Bill Text: NY S04871 | 2009-2010 | General Assembly | Introduced

New York Senate Bill 4871 (Prior Session Legislation)

Introduced

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; further establishes the crime of mortgage fraud in the first and second degree.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2010-01-06 - REFERRED TO BANKS [S04871 Detail]

Download: New_York-2009-S04871-Introduced.html

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4871
                              2009-2010 Regular Sessions
                                   I N  S E N A T E
                                    April 27, 2009
                                      ___________
       Introduced  by  Sen.  FOLEY  -- read twice and ordered printed, and when
         printed to be committed to the Committee on Banks
       AN ACT to amend the banking law, in relation to  unauthorized  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:
   22    5.  Civil  penalties  assessable  against  unlicensed  or unregistered
   23  persons or entities. If any non-exempt unlicensed or unregistered person
   24  or entity engages in activities encompassed by this article, he shall be
   25  liable to any person or entity affected by such activities for a sum  of
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11561-01-9
       S. 4871                             2
    1  money of not less than the amount of money paid to an affected person or
    2  entity in connection with such activities, nor more than four times such
    3  sum; PROVIDED HOWEVER THAT WHERE A NON-EXEMPT UNLICENSED OR UNREGISTERED
    4  PERSON  HAS  CONTINUED  TO  ENGAGE IN SUCH UNAUTHORIZED ACTIVITIES AFTER
    5  RECEIVING A CEASE AND DESIST NOTICE FROM THE SUPERINTENDENT, THE MAXIMUM
    6  AMOUNT OF LIABILITY SHALL BE UP TO TEN TIMES SUCH SUM. Such sum  may  be
    7  sued  for  and recovered by any person or entity for his use and benefit
    8  in any court of competent jurisdiction.
    9    S 4. The banking law is amended by adding a new section 598-a to  read
   10  as follows:
   11    S  598-A. MORTGAGE FRAUD. 1. A FRAUDULENT MORTGAGE ACT IS COMMITTED BY
   12  AN OFFICER, DIRECTOR, TRUSTEE, EMPLOYEE OR AGENT OF A  MORTGAGE  BROKER,
   13  MORTGAGE  BANKER OR EXEMPT ORGANIZATION WHEN SUCH PERSON, AS PART OF, OR
   14  IN SUPPORT OF, AN APPLICATION FOR A MORTGAGE, KNOWINGLY AND WITH  INTENT
   15  TO  DEFRAUD  FORGES  AN  APPLICANT'S SIGNATURE OR PRESENTS, CAUSES TO BE
   16  PRESENTED, PARTICIPATES IN THE PREPARATION OR PRESENTMENT,  OR  PREPARES
   17  WITH  KNOWLEDGE OR BELIEF THAT IT WILL BE PRESENTED TO A MORTGAGE BANKER
   18  OR EXEMPT ORGANIZATION A FORM OF IDENTIFICATION, VERIFICATION OF DEPOSIT
   19  FORM, BANK OR SECURITIES STATEMENT, TAX RETURN, W-2 FORM,  DOCUMENTATION
   20  REGARDING EMPLOYMENT STATUS, RENTAL PROPERTY LEASE OR PROPERTY APPRAISAL
   21  WHICH SUCH PERSON KNOWS TO CONTAIN FALSE INFORMATION CONCERNING ANY FACT
   22  MATERIAL THERETO.
   23    2.  A  PERSON IS GUILTY OF MORTGAGE FRAUD IN THE SECOND DEGREE WHEN HE
   24  COMMITS A FRAUDULENT MORTGAGE ACT. MORTGAGE FRAUD IN THE  SECOND  DEGREE
   25  IS A CLASS E FELONY.
   26    3.  A  PERSON  IS GUILTY OF MORTGAGE FRAUD IN THE FIRST DEGREE WHEN HE
   27  COMMITS A FRAUDULENT MORTGAGE ACT AND  THEREBY  WRONGFULLY  DEFRAUDS  OR
   28  ATTEMPTS  TO WRONGFULLY DEFRAUD MORTGAGE BANKERS OR EXEMPT ORGANIZATIONS
   29  OF MORE THAN TEN MILLION DOLLARS. MORTGAGE FRAUD IN THE FIRST DEGREE  IS
   30  A CLASS D FELONY.
   31    S  5.  This  act shall take effect on the thirtieth day after it shall
   32  have become a law; except  that  the  amendments  to  subdivision  5  of
   33  section  590  of  the  banking law made by section two of this act shall
   34  take effect on the same date as section 8 of chapter 472 of the laws  of
   35  2008 takes effect.