Esta ley enmienda la "Ley de Instituciones Hipotecarias" para penalizar actos fraudulentos cometidos para obtener préstamos hipotecarios. Tipifica diversas acciones fraudulentas relacionadas con la solicitud y obtención de préstamos hipotecarios, estableciendo sanciones penales y administrativas para quienes incurran en ellas. Busca proteger la estabilidad de la industria hipotecaria y al consumidor.
(Approved December 12, 2002)
To amend paragraph (1) of subsection
(b) of Section 11; to add a new Section 12; and to renumber Section 12 as Section 13 of Act No. 97 of June 5, 1973, as amended, known as the "Mortgage Institutions Act", in order to penalize any person who incurs in fraudulent acts to obtain a mortgage loan, among other things.
Housing is one of the fundamental needs of the human being. The Commonwealth of Puerto Rico has the policy that every Puerto Rican family should own a house, and to attain this, we need to keep the mortgage loan industry healthy and free of undesirable practices that attempt against its stability.
In recent years, there has been an increase in the practice of obtaining mortgage loans through tricks, fraud and document falsification, public and private, that result in mortgage foreclosures and substantial losses for financial institutions.
Among the common actions that have been detected are the alteration of income tax returns, employment and salary verifications, checks and checkbooks, and appraisals, and mendacity in the information furnished in loan applications.
This type of action that many times results in substantial economic losses for financial institutions and in mortgage foreclosures, in turn affects
the sale of mortgages in secondary markets and results in the imposition of greater restrictions by federal agencies, such as FHA, FNMA, FMAC and FHLB. The final consequences are that the access to mortgage financing is limited and the costs increase, thus harming the Puerto Rican consumer.
This measure needs to be urgently approved in order to stop the serious fraud problem in mortgage loans applications. Currently, this conduct is not duly typified and regulated by law.
Section 1.- Paragraph (1) is hereby amended, and a new paragraph (11) is added in subsection
(b) of Section 1 of Act No. 97 of June 5, 1973, as amended, to read as follows: "Section 1.- Short title and definitions
(a) Title - the short title of this Act shall be "Mortgage Institutions Act".
(b) Definitions - For the purposes of this Act, the following terms shall have the meanings stated below: (1) Persons or businesses - shall mean individuals, partnerships, associations, trusts, corporations and any other juridical entity engaged in the granting of mortgage loans to finance or refinance the acquisition of real property. (2) ..."
Section 2.- Section 11 of Act No. 97 of June 5, 1973, as amended, is hereby amended to read as follows: "Section 11.- Penalties:
(a) The Commissioner is hereby authorized to impose and collect administrative fines of not less than one hundred (100) dollars nor more than two thousand $(2,000)$ dollars for any violation of the
provisions of this chapter, or of the provisions contained in the rules and regulations promulgated by virtue thereof.
(b) When the nature of the violation of this chapter or the rules or regulations or orders and resolutions issued by the Commissioner justify it, the Commissioner shall bring criminal action against the violator, in lieu of the imposition of the administrative fine authorized by the preceding paragraph.
Each violation to the provisions of this chapter or the provisions contained in the rules or regulations promulgated by virtue thereof, or the orders and resolutions issued by the Commissioner shall constitute a misdemeanor punishable by a fine of not more than five hundred (500) dollars or imprisonment for a term not to exceed six (6) months or both penalties at the discretion of the Court, except for the violation of subsections (2), (5), (7), (8), (9) and (18) of Section 7a of this Act, which shall constitute a felony punishable by a fine that shall not exceed ten thousand $(10,000)$ dollars for each violation or imprisonment for an established term of ten (10) years or both penalties at the discretion of the court. The penalty of imprisonment for a felony may be increased up to a maximum of twelve (12) years should there be any aggravating circumstances; should there be extenuating circumstances, it may be reduced to a minimum of six (6) years. In any case, the court may also impose the penalty of restitution in addition to the established term of imprisonment."
Section 3.- Section 12 is hereby added to Act No. 97 of June 5, 1973, as amended, to read as follows:
"Section 12.- Fraudulent Practices When Obtaining Mortgage Loans Any person who, with the intention of deceiving a mortgage institution or a concessionaire in order to obtain the approval, or to obtain a mortgage loan, including to finance or refinance the acquisition of real property and who incurs in any of the following actions:
(a) Gives false information, oral or written, in any application or document that originates, transfers, terminates or affects any right, obligation or interests, that is, gives false information in credit applications, notes or any other document with the intention of deceiving any natural or juridical person; issues any false statement about a natural fact with the purpose of inducing or persuading any person into an error; or
(b) Uses a false statement with the purpose of inducing or persuading a person to conduct a business; or
(c) Incurs in the crime of falsifying any of the documents that form part of a transaction, including signatures;
(d) Hides, conceals or alter information, or uses false documents through a scheme of fraudulent information; or
(e) Uses any trick, ruse or artful device to defraud another person; or
(f) Knowingly provides or use any false, fictitious, altered or fraudulent document; prepares, falsifies, alters or uses any document knowing its contents are totally or partially fabricated, including the signatures; or
(g) Acts as or represents another person, real of fictitious, under this misappropriated character, and commits any act not authorized by the person falsely represented; or
(h) Receives any benefit, fee, commission or gift or a valuable item from any person, firm or corporation for obtaining or trying to obtain any loan; or
(i) Helps, allows, takes part or instigates any person to incur in any of the acts described in subsections
(a) and
(h) from A to H of this Section, whether or not he/she obtained or did not obtain economic profit, punishable by imprisonment for a fixed term of ten (10) years. The penalty of imprisonment may be increased up to a maximum of twelve (12) years should there be any aggravating circumstances; should there be extenuating circumstances, it may be reduced to a minimum of six (6) years.
The Court, at its discretion, may impose the established fixed imprisonment term and a fine of not less than five thousand $(5,000)$ dollars nor more than ten thousand $(10,000)$ dollars for any violation, penalty of restitution, or any combination thereof."
Section 4.- Section 12 of Act No. 97 of June 5, 1973, as amended, is hereby renumbered as Section 13.
Section 5.- Effectiveness This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 276 (H.B. 1584) of the $4^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend paragraph (1) of subsection
(b) of Section 11; to add a new Section 12; and to renumber Section 12 as Section 13 of Act No. 97 of June 5, 1973, as amended, known as the "Mortgage Institutions Act", in order to penalize any person who incurs in fraudulent acts to obtain a mortgage loan, among other things, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $10^{ ext {th }}$ of September of 2004.
Elba Rosa Rodríguez-Fuentes Director