Chapter 17- Financial Legislation in Georgia

In this lesson, we will cover the Georgia Residential Mortgage Act.

The overall purpose of the Georgia Residential Mortgage Act (GRMA) is to provide oversight within the mortgage industry by requiring those who work as a mortgage broker, lender, or loan originator to be licensed. The GRMA is governed by Georgia Code Sections 7-1-1000 through 7-1-1021. We’ll start with Section 7-1-1002, which sets forth the general licensing requirements.

According to that section, you cannot transact business in the State of Georgia as a mortgage broker, mortgage lender, or mortgage loan originator unless you are licensed or registered by the department utilizing the Nation-wide Multistate Licensing System and Registry (NMLSR). There are certain exemptions to this requirement found in Section 7-1-1001.

In addition, a loan processor or underwriter who is an independent contractor must obtain and maintain a mortgage broker or mortgage lender license and must have and maintain a valid unique identifier issued by the NMLSR.

A mortgage loan originator must be supervised by a mortgage broker, mortgage lender, or exemptee on a daily basis while performing mortgage functions. Furthermore, they must be employed by and work exclusively for only one mortgage broker, lender, or exemptee and must be paid using a W-2 tax form. Each licensed mortgage loan originator must register and maintain a valid unique identifier issued by the NMSLR.

The GRMA also prohibits the purchase, sale, or transfer of a mortgage loan or loan application from or to a mortgage loan originator, broker, or lender who is neither licensed nor exempt from the licensing or registration requirements. Note that a prohibited purchase shall not affect the obligation of the borrower under the terms of the mortgage loan.

Anyone who directly or indirectly controls a person who violates the requirements of the GRMA, including a general partner, executive officer, joint venturer, or director of such person, will be held equally responsible for the violation unless they can prove they did not know and, in the exercise of reasonable care, could not have known of the violation.

Next, we’ll cover section 7-1-1001, which outlines exemptions and registration requirements. There are numerous exemptions to the licensing and registration requirements under the GRMA. Anyone who qualifies for an exemption is not required to obtain a mortgage loan originator, mortgage broker, or mortgage lender license but may still be subject to the registration requirements. Exemptions include:

1. Federally insured banks, credit card banks, savings institutions, and credit unions as well as their wholly owned subsidiaries.
2. A wholly owned subsidiary of a bank holding company; however, a subsidiary is subject to the registration requirements.
3. Registered mortgage loan originators, when acting for any of the entities mentioned in #1 and #2 above; however, the individual must be registered and obtain a unique identifier with the Nation-wide Multistate Licensing System and Registry (NMLSR).
4. Anyone who offers or negotiates terms of a residential mortgage loan with, or on behalf of, an immediate family member. An "immediate family member" means a spouse, child, sibling, parent, grandparent, or grandchild including stepparents, stepchildren, step siblings, and adoptive relationships.
5. An attorney licensed to practice law in Georgia who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator.
6. A Georgia licensed real estate broker or salesperson not actively engaged in negotiating mortgage loans or who is only providing information to a lender or its agent related to an existing or potential short sale transaction if a separate fee is not received. A broker or salesperson who directly or indirectly negotiates, places, or finds a mortgage for others is not exempt.
7. Anyone performing any act relating to mortgage loans under order of any court.
8. A person, estate, or trust making a mortgage loan with his or her own funds for his or her own investment, including a purchase money mortgage for financing sales of their own property.
9. The United States of America, the State of Georgia or any other state, and any agency, division, or corporate instrumentality of any governmental entity. For example, the Department of Veterans Affairs (VA) or the U.S. Department of Housing and Urban Development (HUD).
10. Anyone who offers or negotiates terms of a residential mortgage loan secured by a dwelling that serves as the individual's residence.
11. Anyone who makes a mortgage loan to an employee as an employment benefit.
12. Any licensee under the "Georgia Industrial Loan Act" if the mortgage loan made is for $3,000.00 or less.
13. Nonprofit corporations making mortgage loans to promote home ownership or improvements for the disadvantaged.
14. An employee of a licensed or registered mortgage broker, mortgage lender, or someone exempt from the licensing requirements when acting within the scope of employment and under the supervision of the mortgage broker, lender, or exempted person. The employee must be acting as an employee and not as an independent contractor. A person against whom a cease and desist order has become final shall not qualify for this exemption while under the employment time restrictions of subsection (o) of Code Section 7-1-1004 if such order was based on a violation of Code Section 7-1-1002 or 7-1-1013 or whose license was revoked within five years of the date such person was hired.
15. Anyone who purchases mortgage loans from a mortgage broker or lender solely as an investment.
16. Anyone who makes five or fewer mortgage loans in any one calendar year.
17. Anyone who would be required to be licensed as a mortgage lender or mortgage broker, who is under an exclusive written independent contractor agreement with anyone that is a wholly owned subsidiary of a financial holding company (as defined in the Bank Holding Company Act of 1956, as amended), bank holding company, savings bank holding company, or thrift holding company if the subsidiary:
    • Has provided a surety bond equal to the lesser of $1 million or $50,000.00 per exempt person that provides for full and direct financial responsibility and for the education and supervision of the exempt persons as well as the handling of consumer complaints related to the exempt persons; AND
    • Has applied for and been granted a mortgage broker or mortgage lender license; AND
    • Has paid applicable fees for this license, which shall be the lesser of one-half of the sum of the cost of the individual licenses or $100,000.00.
    • To maintain the exemption, a person shall:
      • Solicit, process, place, or negotiate a mortgage loan to be made only by the licensed subsidiary or its affiliate AND
      • Remain in compliance with Code Section 7-1-1013 and the provisions and prohibitions applicable to employees under Code Section 7-1-1004.
18. An employee of a bona fide nonprofit corporation, acting as a mortgage loan originator only for the nonprofit corporation and who only works with mortgage loans that include terms favorable to the borrower. For a corporation to qualify as a bona fide nonprofit corporation the nonprofit corporation must meet all the following requirements:
    • Be tax-exempt under Section 501(c) (3) of the Internal Revenue Code of 1986.
    • Promote affordable housing.
    • Serve public or charitable purposes, not commercial purposes.
    • Receive funding and revenue, charge fees, and compensate employees in a manner that does not incentivize acting in a manner other than in the best interests of its clients.
    • Provide or identify for the borrower mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs.
    • Satisfy the exemption from licensure set forth in number 13 above.

Keep in mind that most of the above exemptions refer to exemptions from licensure as a mortgage broker or mortgage lender only. Individuals that transact business as a mortgage loan originator, unless specifically exempted, shall obtain a mortgage loan originator license whether they are employed by a mortgage broker, mortgage lender, or person exempted as a mortgage broker or lender.

Next, we’ll cover section 7-1-1003, which outlines the application process for licensure. An application for a license under this article shall be made in writing and under oath. The department may prescribe different classes of licenses for mortgage loan originators, mortgage brokers, and mortgage lenders. An application shall include all the following:

• The legal name and address of the applicant and, if the applicant is a partnership, association, corporation, or other business entity, of every member, officer, and director thereof.
• All names, including, but not limited to, website domain names (URLs), under which the applicant will conduct business in Georgia.
• For mortgage brokers and lenders, the address of the main office or principal place of business and any other office locations, plus the mailing address. Changes must be made in writing prior to that date they are effective.
• For mortgage brokers and lenders, the complete name and address (which must be in Georgia) of the registered agent and registered office for service of process in Georgia. If the applicant is a Georgia corporation, this registered agent shall be the same as the agent recorded with the Secretary of State. Any changes must be made in writing prior to the effective date.
• For mortgage brokers and lenders, the general plan, character of the business, and a financial statement as well as additional information if requested by the department.
• For mortgage brokers and mortgage loan originators, evidence of satisfaction of experience or education requirements, as required by the regulations of the department.
• All applications submitted shall be filed with:
  • Investigation and supervision fees.
  • The items required by Code Section 7-1-1003.2.
  • Other information if required by the department.

Next, we’ll cover the list of prohibited acts as outlined under section 7-1-1013.

It shall be prohibited for any person transacting a mortgage business in or from the State of Georgia to:

• Misrepresent the material facts, make false statements or promises, or submit false statements or documents likely to influence, persuade, or induce an applicant for a mortgage loan, a mortgagee, or a mortgagor to take a mortgage loan, or, through agents or otherwise, pursue a course of misrepresentation by use of fraudulent or unauthorized documents or other means to the department or anyone.
• Misrepresent or conceal, or cause another to misrepresent or conceal, material factors, terms, or conditions of a transaction that is pertinent to an applicant or application.
• Fail to disburse funds in accordance with a written commitment or agreement to make a mortgage loan.
• Improperly refuse to issue a satisfaction of a mortgage loan.
• Fail to account for, or deliver, personal property obtained in connection with a mortgage loan such as money, funds, deposit, check, draft, mortgage, or other document or thing of value which is not the property of the licensee or registrant.
• Engage in any transaction, practice, or course of business which is not in good faith or fair dealing, or which operates a fraud upon any person, in connection with the attempted or actual making of, purchase, transfer, or sale of any mortgage loan.
• Engage in fraudulent home mortgage underwriting practices.
• Induce, require, or permit the applicant for a mortgage loan or mortgagor to sign a security deed, note, loan application, or other pertinent financial disclosure documents with any blank spaces, except blank spaces relating to recording or other incidental information not available at the time of signing.
• Make, directly or indirectly, any residential mortgage loan with the intent to foreclose on the borrower's property. For purposes of this paragraph, a presumption of the intent to foreclose exists if the following circumstances can be demonstrated:
  • Lack of substantial benefit to the borrower; AND
  • Lack of probability of full payment of the loan by the borrower; AND
  • A significant proportion of similarly foreclosed loans by the person.
• Provide an extension of credit or collect a mortgage debt by extortionate means.
• Purposely withhold, delete, destroy, or alter information requested by an examiner of the department or make false statements or material misrepresentations to the department or the NMLSR or in connection with any investigation.

Finally, we’ll cover section 7-1-1014, which outlines disclosure requirements.

Certain disclosures must be made to applicants for mortgage loans, including, without limitation, the following:

1. Prior to accepting an application fee or any third-party fees, such as a property appraisal fee or credit report fee, a disclosure must be made of the fees payable and the conditions under which such fees may be refundable.
2. A mortgage lender must provide to an applicant a written disclosure of the fees to be paid in connection with the commitment and the loan, or the manner in which such fees shall be determined and the conditions under which such fees may be refundable at or before the time a commitment to make a mortgage loan is given.
3. A mortgage lender must disclose to a borrower that failure to meet every condition of the mortgage loan may result in the loss of the borrower's property through foreclosure and the borrower must sign the disclosure at or before the time of the closing of the mortgage loan.

In this lesson, we’ll go over the Georgia Fair Lending Act (GFLA). GFLA was enacted with the intent to protect the borrowers of subprime loans (loans with higher-than-market interest rates) from predatory lending practices. Because these borrowers typically do not qualify for a conventional mortgage loan, lenders often charge excessive fees and exorbitant rates. The GFLA was passed in an attempt to curtail such practices.

Let’s start with section 7-6A-3, which covers limitations of home loans.

In the State of Georgia, home loans are subject to certain limitations and prohibited practices. These include the following:

1. A creditor may not make a home loan that finances, directly or indirectly the following:
   • Any credit life, credit accident, credit health, credit personal property, or credit loss-of-income insurance, debt suspension coverage, or debt cancellation coverage.
   • Any life, accident, health, or loss-of-income insurance without regard to the identity of the ultimate beneficiary of such insurance.
2. If the borrower is in the process of refinancing an existing loan, a creditor or servicer may not recommend or encourage default on the loan prior to, and in connection with, the closing or planned closing of the refinance.
3. A creditor or servicer may not charge a borrower a late payment charge unless:
   • The loan documents specifically authorize the charge AND
   • The charge is not imposed unless the payment is past due for ten days or more AND
   • The charge does not exceed 5 percent of the amount of the late payment.
4. A late payment charge may not be imposed more than once for the same late payment.
5. If a late payment charge is deducted from a payment made on the home loan and such deduction results in a subsequent default on a subsequent payment, no late payment charge may be imposed for such default.
6. A lender may apply any payment made in the order of maturity to a prior period's payment due even if the result is late payment charges accruing on subsequent payments due; and
7. A creditor or servicer may not charge a fee for providing the balance due to pay off a home loan or to provide a release upon prepayment. Except, if the information is provided by facsimile or within 60 days of a previous request, a processing fee up to $10.00 may be charged. Payoff balances must be provided within five business days after the request.

Next, let’s go over section 7-6A-4, which covers "flipping" a Home Loan.

Knowingly or intentionally "flipping" a home loan is not allowed. Flipping a home loan involves a borrower refinancing a home loan that is less than five years old when there appears to be no reasonable, tangible net benefit to the borrower considering all of the circumstances including, but not limited to, the terms of both the new and refinanced loans, the cost of the new loan, and the borrower's circumstances.

A refinancing transaction shall be presumed to be a flipping if:

• A high-cost home loan refinances an existing home loan that was consummated within the prior five years AND
• The original mortgage was originated, subsidized, or guaranteed by a government or a nonprofit organization AND
• The original loan bears a below-market interest rate or has non standard payment terms beneficial to the borrower, such as payments that vary with income, are limited to a percentage of income, or where no payments are required under specified conditions AND
• As a result of the refinancing, the borrower will lose one or more of the benefits of the special mortgage.
• It is important to note that refinancing transactions mortgage loans originated by, purchased by, or assigned to the Georgia Housing and Finance Authority shall not be presumed to be a flipping.

In any action instituted by a borrower alleging a violation of this Code section, the borrower shall only be entitled to costs and attorneys' fees if the presiding judge allows them after determining that the defendant willfully engaged in the act or practice and there was unwarranted refusal by the defendant to fully resolve the matter.

Next, we’ll cover section 7-6A-5, which discussed limitations of high-cost home loans.

High-cost home loans shall be subject to the following limitations and prohibited practices:

1. No prepayment fees or penalties shall be provided for in the loan documents for a high-cost home loan or charged the borrower after the last day of the twenty-fourth month following the loan closing.
2. A high-cost home loan shall not:

• Contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments unless it is adjusted to the seasonal or irregular income of the borrower.
• Include payment terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due.
• Contain a provision that increases the interest rate after default unless it is a variable rate loan and the change is not triggered by the default or the acceleration of the indebtedness.
• Include terms under which more than two periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower.

1. A provision of a high-cost home loan agreement requiring a borrower to assert any claim or defense in a forum that is less convenient, more costly, or more dilatory for the resolution of a dispute than a judicial forum established in this state or that limits in any way any claim or defense the borrower may have is unconscionable and void.
2. A creditor shall not make a high-cost home loan:

• Without first receiving certification from a counselor with a third-party nonprofit organization approved by the United States Department of Housing and Urban Development or the Georgia Housing and Finance Authority that the borrower has received counseling on the advisability of the loan transaction. AND
• Unless a reasonable creditor would believe at the time the loan is consummated that the borrower will be able to make the scheduled payments based upon current and expected income, current obligations, employment status, and other financial resources other than the borrower's equity in the collateral that secures repayment of the loan.

1. A creditor or servicer shall not pay a contractor under a home improvement contract from the proceeds of a high-cost home loan unless they satisfy a few exceptions.
2. A creditor or servicer shall not charge a borrower any fees or other charges to modify, renew, extend, or amend a high-cost home loan or to defer any payment due under the terms of a high-cost home loan.
3. Before initiating foreclosure proceedings, a creditor shall provide written notice of the intent to foreclose to the borrower sent by certified mail, return receipt requested, to borrower’s last known address at least 14 days prior to the publication of the required legal advertisement.
4. If a high-cost loan is accelerated and demand made for payment in full of all sums secured by the security instrument, the borrower or borrower’s agent has the right to cure the default at any time up to the time title is transferred by means of foreclosure by judicial proceeding and sale or otherwise.
5. The borrower shall not be liable for any attorneys' fees relating to the borrower's default that are incurred by the creditor or servicer prior to the time the creditor or servicer files a foreclosure action or takes other action to seize or transfer ownership of the home.
6. After the creditor or servicer files a foreclosure action or takes other action to seize or transfer ownership of the home, the borrower shall only be liable for attorneys' fees that are reasonable, actually incurred, based on a reasonable hourly rate and a number of hours plus any other reasonable and necessary expenses.
7. If a default is cured prior to the initiation of any action to foreclose or to seize or transfer a home, the creditor or servicer shall not institute the foreclosure proceeding or other action for that default.
8. If a default is cured after the initiation of any action to foreclose, the creditor or servicer shall take such steps as are necessary to terminate the foreclosure proceeding or other action.
9. Prior to initiating foreclosure or other action to seize or transfer ownership of a home, a notice of the right to cure the default must be delivered to the borrower informing the borrower of the following:
   1. The nature of the alleged default and of the borrower's right to cure the default by paying the sum of money required. If the amount necessary to cure the default will change during the 30 day period after the effective date of the notice due to the application of a daily interest rate or the addition of late fees as allowed by this chapter, the notice shall give sufficient information to enable the borrower to calculate the amount at any point during the 30 day period. AND
   2. The deadline for curing the default to avoid acceleration and initiation of foreclosure or other action to seize the home and the name, address, and phone number of a person to whom the payment shall be made. The deadline must be at least 30 days from the effective date of the notice. AND
   3. If the default is not cured by the deadline, steps may be taken to terminate the borrower's ownership in the property by commencing a foreclosure proceeding or other action to seize the home. AND
   4. The name and address of the creditor or servicer and the telephone number of a representative whom the borrower may contact if the borrower disagrees with the claim of default or the calculation of the amount required to cure the default.
10. A provision in a high-cost home loan that permits a creditor or servicer, in its sole discretion, to accelerate the indebtedness will not be enforced.
11. All high-cost home loan documents that create a debt or pledge property as collateral shall contain the following notice on the first page in a conspicuous manner: "Notice: This is a mortgage subject to special rules under the 'Georgia Fair Lending Act.' Purchasers or assignees of this mortgage may be liable for all claims and defenses by the borrower with respect to the mortgage."

Next, we’ll cover section 7-6A-6.

If a home loan was made, arranged, or assigned by a person selling home improvements to the dwelling of a borrower, the borrower may assert against the creditor all affirmative claims and any defenses that the borrower may have against the seller or home improvement contractor. Except, this shall not apply to loans other than high-cost home loans unless applicable law requires a certificate of occupancy, inspection, or completion to be obtained and said certificate is not obtained.

Anyone who purchases, is assigned, or otherwise becomes a holder of a high-cost home loan, shall be subject to all affirmative claims and any defenses that the borrower could assert against the creditor, unless the purchaser or holder demonstrates, by a preponderance of the evidence, that the purchaser or holder exercised reasonable due diligence at the time of purchase, or within a reasonable time thereafter, intended to prevent the purchase or assignment of high-cost home loans. The relief granted to a borrower of a high-cost home loan under this section:

• May be asserted by the borrower only in an individual action shall not exceed the sum of the amount of all remaining indebtedness of the borrower under such loan and reasonable attorneys' fees in such individual action. AND
• May be sought by the borrower after notice of acceleration or foreclosure of the loan, asserting a violation of Code Section 7-6A-4 or 7-6A-5 in an individual action to enjoin foreclosure or to preserve or obtain possession of the home secured by the loan. AND
• Must be brought within one year from the date of the occurrence of the violation.

It shall be a violation to attempt in bad faith to avoid the rules of the Georgia Fair Lending Act by dividing any loan transaction into separate parts or structuring a home loan transaction as an open-end loan for the purpose of evading the provisions of the GFLA when the loan would have been a high-cost home loan had it been structured as a closed-end loan. Engaging in any other subterfuge with the intent of evading the GFLA is also a violation.

Next, we’ll cover section 7-6A-7.

Any creditor found by a preponderance of the evidence to have violated the Georgia Fair Lending Act shall be liable to the borrower for the following:

• Actual damages, including consequential and incidental damages. AND
• Statutory damages equal to the recovery of two times the interest paid under the loan. AND
• Punitive damages. AND
• Costs and reasonable attorneys' fees.

A high-cost home loan borrower may be granted injunctive, declaratory, and such other equitable relief as the court deems appropriate in an action to enforce compliance with the GFLA.

Finally, we’ll cover section 7-6A-9.

A creditor, servicer, or insurer providing insurance through premiums financed by a creditor of a home loan who, when acting in good faith, fails to comply with the provisions of the GFLA will not be deemed to be in violation of the GFLA if the creditor, servicer, or insurer establishes that either:

• Within 90 days of the loan closing and prior to receiving any notice from the borrower of the compliance failure, the creditor or servicer has offered appropriate restitution to the borrower and appropriate adjustments are made to the loan, OR
• Within 90 days of discovering a compliance failure and prior to receiving any notice of the compliance failure and the compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such errors:
  • The borrower is notified of the compliance failure, and
  • Appropriate restitution is offered to the borrower, and
  • Appropriate adjustments are made to the loan.
  • Examples of a bona fide error include clerical, calculation, computer malfunction and programming, and printing errors. An error of legal judgment with respect to a person's obligations under this chapter is not a bona fide error.

In this lesson, we will go over the Georgia Residential Mortgage Fraud Act (GRMFA). To understand the Act you must first have a firm understanding of some important terms used throughout. These key terms include the following:

The "mortgage lending process", which means the process through which a person seeks or obtains a residential mortgage loan including, but not limited to, solicitation, application, origination, or negotiation of terms as well as third-party provider services, underwriting, signing and closing, and funding of the loan. It also includes the execution of deeds under power of sale that are required to be recorded pursuant to Code Section 44-14-160 and the execution of assignments that are required to be recorded pursuant to subsection (b) of Code Section 44-14-162. Documents involved in the mortgage lending process include, but shall not be limited to:

• Uniform residential loan applications or other loan applications
• Appraisal reports
• HUD-1 settlement statements
• Supporting personal documentation for loan applications such as W-2 forms
• Verifications of income and employment
• Bank statements
• Tax returns
• Payroll stubs
• Required disclosures

"Pattern of residential mortgage fraud” means one or more misstatements, misrepresentations, or omissions made during the mortgage lending process that involve two or more residential properties, which have the same or similar intents, results, accomplices, victims, or methods of commission or otherwise are interrelated by distinguishing characteristics.

A "person” means a natural person, corporation, company, limited liability company, partnership, trustee, association, or any other entity.

A "Residential mortgage loan” means a loan or agreement to extend credit made to a person, which loan is secured by a deed to secure debt, security deed, mortgage, security interest, deed of trust, or other document representing a security interest or lien upon any interest in one-to-four family residential property located in Georgia including the renewal or refinancing of any such loan.

These are the key terms you need to know for the Act. Now, let’s discuss the most important sections of the Act, starting with section 16-8-102, which specifically covers residential mortgage fraud.

Residential mortgage fraud occurs when a person does any of the following with the intent to defraud:

1. Knowingly makes any deliberate misstatement, misrepresentation, or omission during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process.
2. Knowingly uses or facilitates the use of any deliberate misstatement, misrepresentation, or omission, knowing the same to contain a misstatement, misrepresentation, or omission, during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process.
3. Receives any proceeds or any other funds in connection with a residential mortgage closing that such person knew resulted from a violation of the Act.
4. Conspires to violate any of the provisions of the Act. And;
5. Files or causes to be filed with the official registrar of deeds of any county of this state any document such person knows to contain a deliberate misstatement, misrepresentation, or omission.

An offense of residential mortgage fraud shall not be predicated solely upon information lawfully disclosed under federal disclosure laws, regulations, and interpretations related to the mortgage lending process nor upon truthful information contained in documents filed with the official registrar of deeds of any county of this state for the stated purpose of correcting scrivener's errors, mistakes, inadvertent misstatements, or omissions contained in previously filed documents.

Next, let’s discuss section 16-8-103.

For the purpose of venue under this article, any violation of this article shall be considered to have been committed:

• In the county in which the residential property for which a mortgage loan is being sought is located.
• In any county in which any act was performed in furtherance of the violation.
• In any county in which any person alleged to have violated this article had control or possession of any proceeds of the violation.
• If a closing occurred, in any county in which the closing occurred. OR
• In any county in which a document containing a deliberate misstatement, misrepresentation, or omission is filed with the official registrar of deeds.

Finally, we’ll briefly discuss the penalties under the Act, which are covered under section 16-8-105.

Violation of the Georgia Residential Mortgage Fraud Act is a felony. If convicted, a defendant will be imprisoned for no less than one year and no more than ten years, and/or ordered to pay a fine which will not exceed $5,000.

If the violation involves engaging or participating in a pattern of residential mortgage fraud, or a conspiracy or endeavor to engage or participate in a pattern of residential mortgage fraud, a defendant will be imprisoned for no less than three years and no more than 20 years, and/or ordered to pay a fine which will not exceed $100,000.

Each residential property transaction that results in a violation of this article shall be considered a separate offense.