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Saturday, February 26, 2011

Ryu Bill to Prevent Mortgage Fraud Passes House Unanimously

Rep Cindy Ryu passes important bill in House to prevent mortgage fraud. 
32nd LD Rep Cindy Ryu (D)
The bill will renew funding to an existing account that would have died otherwise.
Ryu represents the 32nd Leg District and live in Shoreline.
Ryu’s fraud-fighting bill wins unanimous House approval
February 26, 2011
OLYMPIA—State Rep. Cindy Ryu reached a major milestone today in her effort to save Washington’s Mortgage Lending Fraud Prosecution Account.
The House of Representatives voted 97-0 for Ryu’s proposal to cancel the scheduled July termination of the fraud-fighting account and extend its life to the end of June, 2016.
“Criminals continue to prey on Washington’s residents with a variety of mortgage fraud schemes,” said Ryu (D-Shoreline), who represents the 32nd District. “Local prosecutors would not have the resources to pursue these criminals without this resource.”

The Legislature created the Mortgage Lending Fraud Prosecution Account in 2003 to help pay for prosecutions of mortgage fraud, which often involve lengthy, complex and costly cases that would otherwise impose heavy burdens on the budgets of county prosecutors. Funds for the account are generated by a $1 surcharge on county recording fees fordeeds of trust.

Deb Bortner, the Director of Consumer Services at the state Department of Financial Institutions, said her agency requested the Ryu bill (HB 1191in order to keep the original law alive and “continue the good work of the prosecutors’ offices all around the state.”

“Before the statute passed, mortgage fraud prosecution was really almost non-existent,” Bortner told a Jan. 18 public hearing. Bortner said the fund has already helped to produce dozens of felony convictions for mortgage fraud, but the crime remains a serious problem for homeowners.

“We know that many Washington homeowners are now suffering as a result, and they’re in the process of losing their homes, all because of mortgage fraud,” Bortner said. “One dollar per deed of trust is really not a lot to provide this kind of service and put those bad actors away so they can’t do this to our homeowners again.”

The $1 surcharge on deeds of trust is unusual in that it was originally suggested by the mortgage industry, which is now urging lawmakers to protect homeowners by passing Ryu’s bill before the fraud-fighting account expires.

“We wholeheartedly support it,” said Steve Buckner on behalf of the Washington Association of Mortgage Professionals. “We do not want the bad actors in the industry. We want them out.”

The chair of the House Business and Financial Services Committee, Rep. Steve Kirby (D-Tacoma), said it was surprising to see a bill that continues a state fee earn universal support.

“Not one single person in the state of Washington has signed in opposed to this bill,” Kirby remarked during the public hearing.
Today’s House vote sends Ryu’s measure to the Senate for further consideration.

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