July 4, 2007 - Residential Mortgage Fraud Act

Policy Name: Residential Mortgage Fraud Act

Date: Signed July 4, 2007; effective December 1, 2007

Code Location: Article 20A of Chapter 14, North Carolina General Statutes: Residential Mortgage Fraud Act. (N.C. G.S.§14-20A.)

 Summary:

The Residential Mortgage Fraud Act established Article 20A of Chapter 14 of North Carolina General Statutes. This legislation defined residential mortgage fraud and declared such action a felony in North Carolina. By establishing mortgage fraud as a per se violation, this act sought to deter fraudulent behavior within the North Carolina mortgage market.

Mortgage fraud is a major component of predatory lending behavior. Article 20A defined mortgage fraud as when a person knowingly makes or attempts to make a misstatement, misrepresentation, or omission within the mortgage lending process, so that a mortgage lender, mortgage broker, or borrower relies on this misinformation. This regulation applies to all mortgage lenders, including non-bank mortgage originators, brokers, and real estate professionals, as well as loan applicants.

The North Carolina Commissioner of Banks, North Carolina Attorney General, and other parties may refer suspected violations of the law to the proper district attorney for prosecution.