Senator Kane Champions Pro-Consumer Anti-Mortgage Fraud Legislation

May 8, 2009

Senator Rob Kane (R-32) helped secure Senate passage of legislation intended to protect consumers by creating the new crime of residential mortgage fraud.

The legislation, Senate Bill 949, An Act Concerning Mortgage Practices, is now subject to further action by the House of Representatives. Senator Kane, the leading Republican Senator, or Ranking Member, of the General Assembly’s Banks Committee, said this legislation is a natural expansion of the mortgage reform law adopted last year (PA 08-176, An Act Concerning Responsible Lending And Economic Security).

“Last year, we passed a comprehensive mortgage reform law that, among other things, is intended to protect people with poor credit from purchasing loans that they cannot afford. The legislation we just passed in the Senate expands upon that protection by making it clear that lenders who knowingly mislead potential borrowers will face serious criminal and civil legal penalties. I am optimistic that the House will pass this bill this year,” said Senator Kane, a co-sponsor of Senate Bill 949.

Under Senate Bill 949, a person commits mortgage fraud when, for financial gain and the intent to defraud, he or she knowingly makes a written statement, misrepresentation or omission that those involved in the mortgage process will rely upon. Receiving, or attempting to receive, funds resulting from residential mortgage fraud are also covered under this bill. Under this proposed legislation, a person who commits a single act of residential mortgage fraud is guilty of a class D felony, while anyone who commits two or more acts of residential mortgage fraud is guilty of a class C felony.

“I am convinced that most mortgage lenders in Connecticut are honest, hard-working people who do everything in their power to make sure that their customers understand the terms of their mortgages. However, we need a law on the books that will reassure and protect all borrowers by making it clear that predatory lending practices are not tolerated in our state,” said Senator Kane.