Michigan is taking a strong stand on mortgage fraud. New state laws that went into effect at the start of the year have redefined mortgage fraud in the eyes of the law and outline strict consequences for perpetrators.

Residential mortgage fraud is now considered a felony in Michigan, and punishment includes up to 20 years in prison and fines up to $500,000.

“Tougher penalties are needed to protect against scammers who think nothing of bilking unsuspecting homeowners and lenders out of tens of thousands of dollars,” said Michigan Gov. Rick Snyder when he signed the law in October.

The new laws define mortgage fraud itself as a criminal act, whereas previously, mortgage fraud fell into the categories of false pretenses and forgery.

Making false statements, concealing facts, or recording documents that contain misstatements or misrepresentations are some of the acts that fall into the category of residential mortgage fraud.

Fraud committed on loans of less than $100,000 can result in up to 15 years in prison and up to $100,000 in fines.

For loans greater than $100,000, fraudsters may receive up to 20 years in prison and up to $500,000 in fines.

Additionally, the statute of limitations on cases involving false pretenses relating to real property, forgery, and mortgage fraud was extended from six to 10 years.

The Michigan Notary Public Act was also amended so that notary violations relating to real property or mortgages is considered a felony and can result in up to 14 years in prison.

“Honest homeowners and lenders should not be held responsible for the terms of a fraudulent mortgage. This change allows the courts to set things right,” Snyder said.