Update to Predatory Lending Law
From the Pioneer Press, May 15, 2007--A third section of the new predatory lending law was signed by Minnesota Gov. Tim Pawlenty this past Monday night. This latest regulatory crackdown comes as the Twin Cities area (along with the rest of the nation) endures a wave of home foreclosures thought to be caused, at least in part, by mortgage fraud. The new law goes into effect Aug. 1.
Under this latest addition, anyone who helps commit mortgage fraud (defined as knowingly misrepresenting or omitting important information in the lending process) commits a felony that is punishable by up to two years in prison. Violators also must pay restitution to their victims. Victims of dishonest mortgage lending or inflated home appraisals also will have the right to sue violators for damages and other costs – something that’s been nearly impossible in the past.
The previous parts of this bill were signed into law over the last month and include a section on requirements for becoming a mortgage broker, approved training hours, and a crackdown on the use of “no documentation” loans.
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