HB516 Alabama 2014 Session

Summary

Primary Sponsor

Phil Williams

Republican

Session

Regular Session 2014

Title

Mortgage fraud, crime of, created

Summary

HB516 would criminalize mortgage fraud in Alabama by defining it, outlining how it can occur, and setting penalties.

What This Bill Does

Creates the crime of mortgage fraud and defines a 'mortgage lending transaction' to include the steps from solicitation and application to funding of a residential mortgage loan or lien. Identifies four actions that can constitute mortgage fraud if done to defraud: misstatements/misrepresentations/omissions in the lending process, using those misstatements, receiving proceeds from the lending process knowing they result from a violation, and filing with probate offices documents that contain misstatements. Assigns penalties based on degree: first-degree mortgage fraud (Class C felony) if there is more than $500 in financial loss or the defendant has a prior mortgage fraud conviction; second-degree mortgage fraud (Class A misdemeanor) otherwise. Notes the bill is exempt from the local-funding provisions of Amendment 621 because it creates a new crime or amends the definition of an existing crime, and it becomes effective on the first day of the third month after passage and governor's approval.

Who It Affects

• Individuals who commit mortgage fraud (potential defendants) and could face criminal penalties depending on the degree.
• Mortgage lenders, borrowers, and other participants in mortgage lending transactions, who are referenced in the definitions and could be affected by what counts as misstatements or omissions and what they rely upon.
• Probate court offices or officials, which could be involved when fraudulent filings related to mortgage lending are made.

Key Provisions

• Defines and creates the crime of mortgage fraud.
• Defines 'mortgage lending transaction' to cover all steps in residential mortgage lending from solicitation to funding.
• Outlines four acts that constitute mortgage fraud (misstatement/misrepresentation/omission in the lending process, use of misstatements, receipt of proceeds from violations, and fraudulent filings with probate offices).
• Sets penalties: first-degree mortgage fraud is a Class C felony; second-degree mortgage fraud is a Class A misdemeanor.
• Clarifies the bill is exempt from Amendment 621 local-funding requirements because it defines a new crime or amends an existing crime.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Mortgages