Rhode Island § 11-18-34 - Fraud and False Dealing

§ 11-18-34. Residential mortgage fraud.

(a) For purposes of this section, the following definitions shall apply:

(1) “Mortgage lending process” means the process through which a person seeks or obtains a residential mortgage loan including, but not limited to, solicitation, application, or origination, negotiation of terms, real estate appraisals and surveys, third-party provider services, underwriting, signing and closing, and funding of the loan.

(2) “Pattern of residential mortgage fraud” means one or more violations of subsection (b)(1) or (b)(2) of this section that involve two (2) or more residential mortgage loans and that have the same or similar intents, results, accomplices, or methods of commission or otherwise result from comparable actions or omissions.

(3) “Person” means an individual, corporation, company, limited liability company, partnership, trustee, association, or any other entity.

(4) “Residential mortgage loan” means a loan or agreement to extend credit made to a person, which loan is secured by a deed to secure debt, security deed, mortgage, security interest, deed of trust, promissory note, or any other document representing a security interest or lien upon any interest in a one-to-four-family residential property including the renewal, modification, or refinancing of any such loan.

(5) “Victim” means a person who experienced personal loss, including, but not limited to monetary loss, due to a violation of subsection (b) of this section.

(b) A person commits residential mortgage fraud when, with the intent to defraud, such person:

(1) Knowingly makes an omission of a material fact or a written misrepresentation or misstatement of a material fact during the mortgage lending process with the intention that a mortgage lender, a borrower, or any other person who or that is involved in the mortgage lending process will rely on the absence of such material fact or the making of such material misrepresentation or misstatement; or

(2) Knowingly uses or facilitates the use, or attempts to use or facilitate the use, of any omission of a material fact or written misrepresentation or misstatement of a material fact during the mortgage lending process with the intention that a mortgage lender, a borrower, or any other person who or that is involved in the mortgage lending process will rely on the absence of such material fact or the making of such material misrepresentation or misstatement; or

(3) Knowingly receives, or attempts to receive, proceeds or any other funds in connection with a residential mortgage transaction that resulted from an act or acts constituting a violation of subsection (b)(1) or (b)(2) of this section; or

(4) Conspires with or solicits another to engage in an act or acts constituting a violation of subsection (b)(1) or (b)(2) of this section; or

(5) Files, or causes to be filed, with a city or town clerk any document involved in the mortgage lending process that the person knows to contain an omission of a material fact or a written misrepresentation or misstatement of a material fact.

(c) Any person who violates this section, upon conviction, shall be subject to the following penalties:

(1) Any person who commits an offense under subsection (b) of this section shall be guilty of a felony and subject to imprisonment for not more than ten (10) years, a fine of not more than ten thousand dollars ($10,000), or both.

(2) Any person who engages or participates in a pattern of residential mortgage fraud, or conspires or endeavors to engage or participate in a pattern of residential mortgage fraud, shall be guilty of a felony and subject to imprisonment for not more than twenty (20) years, a fine of not more than one hundred thousand dollars ($100,000), or both.

(3) Any person who commits an offense and knew that the victim was vulnerable due to age, disability, infirmity, reduced physical or mental capacity, or national origin shall be guilty of a felony and subject to imprisonment for not more than fifteen (15) years, a fine of not more than fifteen thousand dollars ($15,000), or both.

(4) The court shall order restitution to any victim.

(5) In addition to any criminal penalties above, any person found in violation of this section shall forfeit anything of value received by them in the course of such violation, less any restitution they actually paid pursuant to subsection (c)(4) of this section. Action for recovery of these amounts shall be brought in the superior court of any county in which any element of the crime occurred. The actions shall be brought in the name of the state by the attorney general for the benefit and use of the state.

(d) It shall be sufficient in any prosecution for residential mortgage fraud to show that the party accused did the act with the intent to defraud. It shall be unnecessary to show that any particular person was harmed financially in the transaction or that the person to whom the material misstatement, misrepresentation, or omission was made relied upon the misstatement, misrepresentation, or omission.