A bill that could land mortgage servicers in prison for foreclosure fraud in New York passed the state Assembly Thursday.
An identical version of the bill is still sitting in a New York State Senate committee.
Servicers could face up to a year in jail and a $1,000 fine in the event they “authorize, prepare, execute or offer for filing false documents in a pending or prospective residential foreclosure action.” Multiple acts of “robo-signing” would be a class E felony with up to four years in prison.
The bill also makes it a class A misdemeanor for an employee of the servicing shop to execute the fraudulent signatures.
“For many middle class New Yorkers, their life savings is in their home. To take away people’s homes under fraudulent circumstances is a crime deserving of jail time,” said New York Attorney General Eric Schneiderman, who drafted the legislation.