Pending legislation in New York would impose criminal penalties on individuals that engaged in robosigning and their managers that knowingly fail to prevent it. The Foreclosure Fraud Prevention Act of 2012, which was drafted by Attorney General Eric Schneiderman and passed the Assembly on June 21, would make it a class A misdemeanor for an agent of a residential mortgage business to authorize, prepare, execute, offer or present for filing false documents when the person knows or believes that the documents will be filed with a court or other public office. In addition, it would be a class E felony to do so in five or more foreclosure actions within a one-year period. Finally, a manager who fails to prevent residential mortgage fraud from continuing to occur would be guilty of a class E felony.
Alert June 26, 2012