An Act To Impose Penalties for Residential Mortgage Loan Fraud and False Representation Concerning Title
Maine Legislature, Session 126, LD 0784
Committee: Insurance and Financial Services
Sponsors: BEAVERS, DUTREMBLE, CASAVANT, CHIPMAN, LAJOIE, MARKS, PEASE, MASON
Amends: 9-A MRSA §9, 14 MRSA §6326

Legislative Document 
No. 784 
H.P. 535 
House of Representatives, February 28, 2013 
An Act To Impose Penalties for Residential Mortgage Loan Fraud 
and False Representation Concerning Title 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative BEAVERS of South Berwick. 
Cosponsored by Senator DUTREMBLE of York and 
Representatives: CASAVANT of Biddeford, CHIPMAN of Portland, LAJOIE of Lewiston, 
MARKS of Pittston, PEASE of Morrill, Senator: MASON of Androscoggin. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  9-A MRSA §9-409 is enacted to read: 
§9-409.  Residential mortgage loan fraud; penalties 
1.  For the purposes of this section, "residential mortgage loan" has the same meaning 
as in section 8-506, subsection 1, paragraph L. 
2.  A creditor or other person who is a participant in a residential mortgage loan 
transaction is guilty of residential mortgage loan fraud if the creditor or other person: 
A.  Knowingly or recklessly makes a false statement or misrepresentation concerning 
a material fact or knowingly conceals or fails to disclose a material fact; 
B.  Knowingly or recklessly uses or facilitates the use of a false statement or 
misrepresentation made by another person concerning a material fact or knowingly 
uses or facilitates the use of another person's concealment or failure to disclose a 
material fact; 
C.  Knowingly or recklessly receives any proceeds or any other money in connection 
with a residential mortgage loan transaction that the creditor or person knows resulted 
from a violation of paragraph A or B; 
D.  Knowingly or recklessly conspires with another person to violate any of the 
provisions of paragraphs A, B and C; or 
E.  Knowingly or recklessly files or causes to be filed with a registry of deeds in 
which the mortgage deed is or by law ought to be recorded a document that the 
creditor or person knows to include a misstatement, misrepresentation or omission 
concerning a material fact. 
Residential mortgage loan fraud is a Class C crime. 
3.  A person is guilty of engaging in a pattern of residential mortgage loan fraud if the 
person commits one or more violations of subsection 2 in 2 or more transactions: 
A.  That have the same or similar pattern, purposes, results, accomplices, victims or 
methods of commission or are otherwise interrelated by distinguishing 
characteristics; 
B.  That are not isolated incidents within the preceding 4 calendar years; and 
C.  In which the aggregate loss or intended loss is more than $250. 
Engaging in a pattern of residential mortgage loan fraud is a Class B crime. 
4.  Each residential mortgage loan transaction in which a person violates a provision 
of subsection 2 constitutes a separate violation. 
5.  Except as otherwise provided in this subsection, if a lender or any agent of the 
lender is convicted of the offense of residential mortgage loan fraud in violation of this 
section, the residential mortgage loan transaction with regard to which the fraud was 
committed may be rescinded by the borrower within 6 months after the date of the 
conviction if the borrower gives written notice to the lender and records that notice with 
the registry of deeds in that county in which the mortgage was recorded. A residential 
mortgage loan transaction may not be rescinded pursuant to this subsection if the lender 
has transferred the mortgage to a bona fide purchaser. 
6.  The Attorney General may investigate and prosecute a violation of this section. 
7.  In addition to the criminal penalties imposed for a violation of this section, a 
creditor or other person who violates this section is subject to a fine of not more than 
$5,000 for each violation. This fine must be recovered in a civil action, brought by the 
Attorney General. In such an action, the Attorney General may recover reasonable 
attorney's fees and costs. 
8.  The owner or holder of a beneficial interest in real property that is the subject of  
residential mortgage loan fraud may bring a civil action in the District Court in and for 
the county in which the real property is located to recover any damages suffered by the 
owner or holder of the beneficial interest plus reasonable attorney's fees and costs. 
Sec. 2.  14 MRSA §6326 is enacted to read: 
§6326.  False representation concerning title; penalties 
1.  Violation; Class C crime.  A person is guilty of making a false representation 
concerning title if the person: 
A.  Knowingly or recklessly claims an interest in, or a lien or encumbrance against, 
real property in a document that is recorded with a registry of deeds in which the 
mortgage deed is or by law ought to be recorded and the person knows or has reason 
to know that the document is forged or groundless, contains a material misstatement 
or false claim or is otherwise invalid; 
B.  Knowingly or recklessly executes or notarizes a document purporting to create an 
interest in, or a lien or encumbrance against, real property that is recorded with a 
registry of deeds in which the mortgage deed is or by law ought to be recorded and 
the person knows or has reason to know that the document is forged or groundless, 
contains a material misstatement or false claim or is otherwise invalid; or 
C.  Knowingly or recklessly causes a document described in paragraph A or B to be 
recorded with a registry of deeds in which the mortgage deed is or by law ought to be 
recorded and the person knows or has reason to know that the document is forged or 
groundless, contains a material misstatement or false claim or is otherwise invalid. 
Making a false representation concerning title is a Class C crime. 
2.  Engaging in pattern of making false representations; violation.  A person is 
guilty of engaging in a pattern of making false representations concerning title if the 
person commits one or more violations of subsection 1 in 2 or more transactions: 
A.  That have the same or similar pattern, purposes, results, accomplices, victims or 
methods of commission or are otherwise interrelated by distinguishing 
characteristics; 
B.  That are not isolated incidents within the preceding 4 calendar years; and 
C.  In which the aggregate loss or intended loss is more than $250. 
Engaging in a pattern of making false representations concerning title is a Class B crime. 
3.  Civil violation.  In addition to the criminal penalties imposed for a violation of 
this section, a person who violates this section is subject to a fine of not more than $5,000 
for each violation. This fine must be recovered in a civil action, brought by the Attorney 
General. In such an action, the Attorney General may recover reasonable attorney's fees 
and costs. 
4.  Private right of action.  Except as otherwise provided in this subsection, the 
owner or holder of a beneficial interest in real property that is the subject of a false 
representation concerning title may bring a civil action in the District Court in and for the 
county in which the real property is located to recover any damages suffered by the 
owner or holder of the beneficial interest plus reasonable attorney's fees and costs. The 
owner or holder of the beneficial interest in the real property must, before bringing a civil 
action pursuant to this subsection, send a written request to the person who made the false 
representation to record a document that corrects the false representation.  If the person 
records such a document no later than 20 days after the date of the written request, the 
owner or holder of the beneficial interest may not bring a civil action pursuant to this 
subsection. 
SUMMARY 
This bill establishes civil and criminal penalties for those persons engaging in 
residential mortgage loan fraud and making a false representation concerning title.