Hammoud

LANSING – Earlier this year, the state of Michigan was listed as one of the top 10 states for mortgage fraud. But a new set of bills passed late last month will increase penalties and give more authority to the state to crack down on what has become a widespread, serious problem.

Rashida Tlaib

Last month, Michigan Governor Rick Snyder signed into law several mortgage fraud related bills designed to combat this problem, as well as other major financial crimes. These bills included House Bills 4462, 4478 and 4492, along with Senate Bills 249-252 and 43.

Senate Bill 43 is considered the central part of this mortgage fraud package, and was sponsored by Senate Democratic Floor Leader Tupac A. Hunter (D-Detroit). It establishes a “Mortgage Fraud” crime in Michigan. This bill makes mortgage fraud a felony punishable by up to 20 years in prison and fines of up to $500,000. Other bills create new thresholds for false pretense crimes, raising the penalties for higher amounts of fraud. They also extend the statute of limitations for real estate related fraud from six years to ten years. Senate Bill 252 makes it a felony for a violation of the Notary Act in relation to a real estate or mortgage document.  The newly enacted laws also increase the guidelines and penalties for crimes of forgery or uttering and publishing of real estate documents. 

 “In working with Wayne County Prosecuting Attorney Kym Worthy and other legal experts, it was clear that mortgage fraud was an increasing problem, but that the state’s laws weren’t properly equipped to handle it,” Hunter said about the need for new legislation. 

Abed Hammoud, currently an Assistant U.S. Attorney for the Eastern District of Michigan, has played a central role in the fight against mortgage fraud as well. Hammoud was the Lead Attorney of the Deed & Mortgage Fraud Task Force in Wayne County under Prosecutor Worthy. This Task Force was in charge of investigating and prosecution mortgage fraud cases and other white collar crimes.

Hammoud’s work and experience in this fraud area started the discussion about the need for new laws. The details of these bills emerged through Wayne County’s Task Force under Hammoud’s leadership and were suggested to the legislature by the County and through the help and support of the Prosecuting Attorneys Association of Michigan (PAAM). It took over two years of discussions and meetings between all stakeholders as well as extensive legislative efforts to produce these bills. While still working for the County, Hammoud testified on May 3rd of this year in Lansing about the need for such legislation, as he is considered an expert in the field of prosecuting mortgage fraud crimes.

“Sometimes it’s not about the technicality of what the bills do as much as it is the true stories of people losing their homes,” State Rep. Rashida Tlaib (D-15) said about Hammoud’s testimony on his experiences of seeing first-hand the devastation caused by this type of fraud. 

“Hammoud basically came up with where the holes were (in the previous laws), and talked about the barriers he had to face in trying to put people behind bars who had committed mortgage fraud,” added Tlaib. She had visited Worthy’s prosecutor’s office prior to the passage of the bills to inform her of a problem she was having in her district about people opening small public notary offices and using them to conduct scams. 

According to Tlaib, who worked to help ensure the passing of the bills in Lansing, prosecutors previously had to use other existing laws, such as forgery and false pretenses, to prosecute mortgage fraud. But the more comprehensive laws, which were supported by both the Democrat and Republican sides of the aisle, make it easier to prosecute and punish those responsible for committing any one of these devastating financial crimes. 

 “With these new mortgage fraud laws in place, the punishment will fit—and ideally deter—the crime. People who exploit homeowners for financial gain will now face serious repercussions,” Hunter said.