- January 27, 2012
- All Michigan Issuing Offices
- Mortgage Fraud Statute (Public Act 205 of 2011)
Please be advised that on October 20, 2011, the Governor of Michigan signed into law Public Act 205 of 2011 which went into effect January 1, 2012. The statute describes certain conduct as constituting criminal mortgage fraud and establishes penalties and liability for damages. Sec. 219d. (1) describes the prohibited conduct and Sec. 219d. (4) provides that a person who violates subsection (1) can be found guilty of a felony punishable by fine and imprisonment. (Please see attached.)
Importantly, subsection (7) provides an affirmative defense for an employer to the prosecution of a defendant if, by a preponderance of the evidence, the employer has in force at the time of the violation and continues to have in force a written policy that includes all of the following:
- A prohibition against conduct that violates this section by employees and agents of the defendant.
- Penalties or discipline for violation of the policy.
- A process for educating employees and agents concerning the policy and consequences of a violation.
- A requirement for criminal history check before employing an employee or engaging an agent and a requirement that the defendant will not employ or engage an individual whose criminal history check reveals a previous conviction of a crime involving fraud.
The statute goes on to require that the defendant demonstrates that it enforces the written policy described above and before the violation of this section, the defendant communicated the written policy described and the consequences for violating the policy to the employee or agent who committed the violation.
It is recommended that each policy issuing office/Agent consult with their own counsel to institute their own policies and procedures to install the safeguards identified in the statute.
Please disseminate this Bulletin to all appropriate office personnel.
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.