Is Virginia Okay with Foreclosure Fraud?

As we gear up for the 2012 General Assembly session, we must review important bills from last year. Among the most important, was cracking down on foreclosure fraud. At last year’s General Assembly Session, Virginia’s legislators voted against a bill intended to reduce foreclosure fraud.  We all know about the robo signing scandal and the foreclosures using fake signatures that threatens property rights in Virginia. Yet Virginia’s legislators refused to protect property rights in the Commonwealth by killing a bill that would have made anyone who uses fake or fraudulent signatures in a foreclosure liable to the injured party.

This bill was barely half a page long and the most significant part said:

“Any person who knowingly makes, uses, or causes to be made or used a false or fraudulent record, document, or statement in support of any foreclosure upon property under this chapter shall be liable to the injured party.”

Examples of fake signatures on foreclosure documents

This is not a partisan issue. This is not about being pro-bank or anti-bank. This is about preserving and protecting property rights which lie at the heart of our economy. Virginia should not allow property to be taken away using fake or fraudulent signatures. Delegate Bob Marshall (R-Manassas) also sponsored a bill that included the above mentioned provisions to end foreclosure fraud. He passionately spoke about this issue in an op/ed saying:

“This is not simply a problem that affects upside-down mortgages, out of work Virginians or ‘dead beats.’   The lack of proof of legal title to a home potentially affects up to 65 million mortgage holders in the U.S.”

Although this bill was dramatically reduced in size and scope  it still had opposition in the State Senate, with fourteen Senators voting against it.

Despite ultimately passing in the State Senate, this common sense reform died in the Virginia House of Delegates. It was killed in the House Courts Committee, Civil Subcommittee where almost every Delegate voted to kill it on a voice vote.

Since then the foreclosure fraud scandal continued to devastate Virginia’s economy. In 2012, Virginia’s lawmakers have another chance to crack down on foreclosure fraud. We should all be watching to see if they take it.

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