Industry News

Arizona could make mortgage fraud a felony

Bill awaits governor's approval

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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....