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.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
We're here to help. Free 90-day trial for new subscribers.Click Here ×