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WBK Industry News - State Regulatory Developments

Rhode Island Enacts Provisions Regarding Mortgage Fraud

On July 5, 2017, Rhode Island enacted House Bill 5695 which introduces new definitions, penalties, and statute of limitations relating to residential mortgage fraud.  The bill was effective upon passage.

Among other new definitions, House Bill 5695 introduces a definition for “mortgage lending process,” “pattern of residential mortgage fraud,” and “residential mortgage loan” under Chapter 11-18 of Rhode Island’s General Laws.

The bill also specifies when a person commits residential mortgage fraud and lays out appropriate penalties for committing this offense and/or participating in a pattern of residential mortgage fraud.  Specifically, a person who commits residential mortgage fraud is guilty of a felony and subject to imprisonment for a maximum of ten years and/or a fine of up to $10,000.  Moreover, a person who engages or participates in a “pattern of residential mortgage fraud” or conspires or endeavors to do so is guilty of a felony and subject to imprisonment for a maximum of 20 years and/or a fine of up to $100,000.  There are further penalties for persons committing such offenses against victims that the perpetrator knew were vulnerable due to age, disability, infirmity, reduced physical or mental capacity, or national origin.  Finally, in addition to these criminal penalties, the perpetrator may be forced to forfeit anything of value received in the course of the violation.

The bill amends Chapter 12-12 of the General Laws to include unlawful appropriation, false financial statement to obtain loan or credit, false statement to obtain a loan, bank fraud, and residential mortgage fraud as offenses with a statute of limitations of 10 years.

The full text of the bill is found here.