LANSING – In a move that will strengthen consumer protections and reduce the number of homes that end up in foreclosure, State Representative Jeff Mayes (D-Bay City) today announced that his plan to crack down on mortgage fraud has passed the House and Senate and is on its way to the Governor to be signed into law.
"As the economy has worsened, pressure has ratcheted up on appraisers to make an inflated appraisal of a home," Mayes said. "We're not going to get out of the foreclosure epidemic if our hardworking families owe more on their homes than what they're actually worth. I applaud my colleagues for joining me in this fight to protect Michigan's homeowners."
Mayes' plan would prohibit the practice of coercing an appraiser in order to receive a predetermined appraisal, and forbids an appraiser from developing and communicating an appraisal set by a client in order to receive a predetermined appraised value. The plan also increases criminal penalties and civil fines for violations of acts regulating mortgages and brokers, lenders, and mortgage servicers. Violators would face a maximum fine of $15,000 and up to three years in prison.
The bipartisan, bicameral plan passed both chambers unanimously, and is supported by the AARP, the Michigan Association of Realtors, the Michigan Mortgage Brokers Association and the Michigan Mortgage Lenders Association.
"With a tough winter in full swing, we must do everything we can to keep our residents in their homes," Mayes said. "This plan attacks the foreclosure epidemic by protecting homeowners from inflated home values that can drastically increase the cost of a family's mortgage. By cracking down on this fraud, we can ensure that nobody is trying to make a quick buck on the backs of Michigan's working families."