Mortgage fraud will be a felony in Arizona under legislation headed to the governor’s desk.
House Bill 2040 would make deliberate misrepresentations to lenders — such as inflated appraisals or falsified borrower incomes used to obtain loans that exceed a home’s true worth — class four felonies, punishable by up to three years in prison.
Those who engage in “a pattern of residential mortgage fraud” or a conspiracy would face class two felony charges, punishable by up to 10 years in prison.
House lawmakers approved the bill last week in a 51-5 vote, and the legislation received unanimous Senate approval Monday.
Arizona ranks in the top 10 states in the country for foreclosures, according to RealtyTrac.