Inman News published a report that we may be seeing some new legislation that would mortgage fraud a second degree felony here in Utah.  We’re currently the second worst state in the nation for mortgage fraud (source), per capita.

As it stands now, the bill would view mortgage fraud much like racketeering, which would allow the state to seize illegally gotten assets in order to provide restitution to victims.

This would be a welcome change, in my opinion.   I’m not big on bigger goverment, but this is clearly a case where the goverment should be involved because it involves the enforcement of property rights.

Rep. Paul Ray from Clearfield is helping push this through - thanks Paul!

The FBI has reported that mortgage fraud losses in the United States more than doubled from 2004 to 2005.  The exact figures are $1 billion in 2005, up from $429 million in 2004.  Utah was listed in the top 10 states for mortgage fraud activity in 2004, per capita, according to the same report.

I’ve also heard that Utah is either number two or three for mortgage fraud in 2005, behind Florida, but I can’t confirm right now.  I will post a link to the source, once I can confirm.

Misrepresenting any information on a uniform mortgage loan application, including the source of a down payment, can be considered fraud.  Utah is considering legislation that would criminalize mortgage fraud.  So be accurate when completing your next mortgage application, whether it be to purchase a new home, refinance your existing loan, or take out a home equity line of credit (heloc).