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


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Leaders from across the industry answered our call to come to Inman Connect and share essential advice for leveling up your 2021.SEE THE SPEAKERS×
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription