A Utah legislative committee is recommending the passage of a bill aimed at increasing criminal and civil penalties against people involved in mortgage fraud.

The Senate Business and Labor Standing Committee on Tuesday unanimously approved SB134 for further consideration by the state Legislature.

The measure, sponsored by Sen. Sheldon Killpack, R-Syracuse, would create criminal and civil enforcement tools for the state to investigate and prosecute people engaging in real-estate fraud. Supporters said the measure is needed to address the trend of fraud perpetrated in Utah that has contributed to the current real-estate crisis.

Killpack said current law does not allow the state to adequately pursue people who commit mortgage fraud. The measure would strengthen regulatory provisions and create a mortgage-fraud prosecution team in the Attorney General's office. The team would consist of a full-time prosecutor, a paralegal and two investigators.

John Norman, executive director of the Utah Mortgage Lenders Association, said the measure gives the state the tools necessary to put "bad actors in jail" and "doesn't increase the regulatory burdens for the mortgage industry."

Chris Sloan, the head of the Utah Association of Realtors, also endorsed the proposal.


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