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State Representative Joe Atkins
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4192
For more information contact: Chris Shields 651-296-8873
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ATKINS, PAWLENTY PROPOSE PREDATORY LENDING LEGISLATION
Bipartisan bill makes mortgage fraud a specific crime
ST. PAUL - Governor Tim Pawlenty and State Representative Joe Atkins, Chair of the House Commerce Committee, recently unveiled a legislative package reforming the way the mortgage origination industry is licensed and regulated in Minnesota. The reforms include making mortgage fraud a specific crime in Minnesota, requiring mortgage licensees to be business entities with minimum net worth requirements and requiring new training for mortgage loan officers.
The proposals will help protect consumers from mortgage fraud as the real estate market in Minnesota and nationally slows down, exposing more homeowners to potential problems. Mortgage fraud has increased in volume and sophistication recently, with new cases involving real estate agents, mortgage brokers, appraisers and title companies all conspiring to complete transactions for loans that often exceed the value of the property.
“We have learned that some of these mortgage predators are literally like traveling circuses, moving from town to town across the Midwest, ripping people off. We need the tools to chase these folks out of town and make them think twice about even coming here in the first place," said Representative Atkins.
The new proposals support the Guidelines on Nontraditional Mortgage Products recently sent to all licensed mortgage originators by the Department of Commerce in December of 2006. The guidelines encourage lenders to make more meaningful disclosures and more careful underwriting to protect consumers from mortgage products they cannot afford.
In an effort to give regulators more options for prosecution of mortgage fraud, the bill would make mortgage fraud a specific crime in Minnesota statute. Currently mortgage fraud cases are prosecuted using other statutes such as mail fraud or money laundering.
“As mortgage fraud gets more pervasive and sophisticated, we need to give our regulators the tools they need to detect and deter these crimes, and the teeth they need to successfully remove the bad actors from the marketplace,” Governor Pawlenty said.
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