Revision: March 8, 2016, midnight
\t \t\tSB 155-FN-A - AS AMENDED BY THE HOUSE
03/19/2015 0805s
6Jan2016... 2504h
2015 SESSION
\t15-0332
\t01/03
SENATE BILL\t\t155-FN-A
COMMITTEE:\tExecutive Departments and Administration
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\tThis bill establishes a process for restitution assistance for victims of the Financial Resources Mortgage (FRM) fraud. Under this bill, the FRM victims’ contribution recovery fund committee shall cause through its attorney or administrator restitution assistance from the FRM victims’ contribution recovery fund for such victims.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/19/2015 0805s
6Jan2016... 2504h\t15-0332
\t01/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Fifteen
AN ACT\testablishing the Financial Resources Mortgage (FRM) victims’ contribution recovery fund for victims of the FRM fraud and continually appropriating a special fund.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 Statement of Purpose.
\t\tI. The general court hereby finds that there has been documented evidence that certain state agencies made mistakes knowingly or unknowingly that resulted in the continuation of the Financial Resources Mortgage(FRM) fraud causing financial harm to many victims.
\t\tII. Therefore, the general court hereby establishes the FRM victims’ contribution recovery fund to receive contributions to provide restitution assistance for victims of the FRM fraud.
\t2 New Chapter; FRM Victims’ Contribution Recovery Fund. Amend RSA by inserting after chapter 359-O the following new chapter:
CHAPTER 359-P
FRM VICTIMS’ CONTRIBUTION RECOVERY Fund
\t359-P:1 Definitions. In this chapter:
\t\tI. “Claimant” means a person who is a victim of the Financial Resources Mortgage fraud and who has filed a complete application for recovery assistance under this chapter.
\t\tII. “Committee” means the FRM victims’ contribution recovery fund committee established in RSA 359-P:4.
\t\tIII. “Financial Resources Mortgage” means Financial Resources Mortgage, Inc., C L and M, Inc., and any predecessor, successor, or affiliated entities, and any entities established by, through, or with Scott Farah or Donald Dodge, through which moneys of Financial Resources Mortgage, Inc., C L and M, Inc., and any predecessor, successor, or affiliated entities passed.
\t\tIV. “Financial Resources Mortgage fraud” means fraudulent acts committed by Financial Resources Mortgage or its principals where loans brokered by or serviced by Financial Resources Mortgage.
\t\tV. “Fund” means the FRM victims’ contribution recovery fund established in RSA 359-P:2.
\t\tVI. “Person” means an individual, corporation, partnership, association, joint stock company, unincorporated organization, or any other entity.
\t\tVII. “Qualifying claimant” means a person who suffered financial losses as a result of the Financial Resources Mortgage fraud and is a claimant eligible for recovery assistance under this chapter. Qualifying claimant shall not include a borrower under any loan transaction borrowed or serviced by Financial Resources Mortgage.
\t\tVIII. “Recovery assistance” means payments from the fund to persons who suffered financial losses as a result of the Financial Resources Mortgage fraud.
\t\tIX. “Victim” means a person who suffered monetary injury as a result of the Financial Resources Mortgage fraud.
\t359-P:2 FRM Victims’ Contribution Recovery Fund Established.
\t\tI. There is hereby established the FRM victims’ contribution recovery fund. The fund shall be nonlapsing and continually appropriated to the committee. The fund shall be capped at $10,000,000 and shall consist of state, public, and private sector gifts and contributions of any kind.
\t\tII. The fund shall be used for awarding recovery assistance pursuant to this chapter.
\t\tIII. The total amount in the fund less costs of administration shall be distributed on a pro rata basis to qualifying claimants annually on December 31 until all such claims are satisfied.
\t359-P:3 Eligibility for Recovery Assistance.
\t\tI. Except as otherwise provided in this chapter, a claimant shall be eligible for recovery assistance at the rate of 50 cents on each dollar lost by the claimant under this chapter if the claimant:
\t\t\t(a) Submits all supplemental documents as requested by the committee.
\t\t\t(b) Can demonstrate loss, to the committee’s satisfaction, due to the Financial Resources Mortgage fraud.
\t\t\t(c) Meets all other requirements of this chapter, as determined by the committee.
\t\tII. In addition to a qualifying claimant and except as otherwise provided in this chapter, a surviving spouse or surviving child of a qualifying claimant shall be eligible for recovery assistance under this chapter.
\t359-P:4 Committee Established.
\t\tI. There is established the FRM victims’ contribution recovery fund committee. The committee shall consist of the following members:
\t\t\t(a) Two members of the house commerce and consumer affairs committee and 2 members of the house finance committee, appointed by the speaker of the house of representatives.
\t\t\t(b) Two members of the senate commerce committee and 2 members of the senate finance committee, appointed by the president of the senate.
\t\tII. The first meeting of the committee shall be held within 45 days of the effective date of this section and shall be called by the first-named house member. The committee chairperson shall be chosen from among the members.
\t\tIII. The committee shall hire/appoint a private attorney or administrator to collect gifts and contributions, review applications for assistance submitted pursuant to this chapter, and make awards of assistance in accordance with the procedures of this chapter. The committee shall negotiate the attorney’s or administrator’s compensation which shall be no more than 10 percent of the privately contributed funds.
\t\tIV. In the event of a tie vote on any matter, the chairperson’s vote shall break the tie.
\t\tV. The attorney or administrator shall make quarterly reports to the committee, beginning on November 1, 2015, which shall include all transactions made from the fund. The committee shall make semi-annual reports, beginning on December 15, relative to its work to the governor, the president of the senate, and the speaker of the house of representatives.
\t359-P:5 Recovery Assistance.
\t\tI. A victim eligible for recovery assistance under RSA 359-P:3 may file an application for recovery assistance with the committee on the following form:
Financial Resources Mortgage, Inc and CL&M, Inc. Victims Indemnification Application
Name _______________________________________
Address _____________________________________
\t\t______________________________________
Phone_______________________________________
E-mail_______________________________________
Social Security No.____________________________
I.) Proof of Claim Federal Bankruptcy Court Case 09-14565-JMD and 09-14566-JMD date filed ____________________
\tLoans or Mortgages claimed (copy attached)
\t1. ________________________________________\tAmount $ __________
\t2. ________________________________________\tAmount $ __________
\t3. ________________________________________\tAmount $ __________
\t4. ________________________________________\tAmount $ __________
\t5. ________________________________________\tAmount $ __________
\t6. ________________________________________\tAmount $ __________
\t7. ________________________________________\tAmount $ __________
\t8. ________________________________________\tAmount $ __________
\t9. ________________________________________\tAmount $ __________
\t10. ________________________________________\tAmount $ __________
\tTotal Proof of Claim\tAmount $___________
II.) Were you a defendant in case no. 09-1184-JMD? Yes No
\tWere you dismissed from the case? Yes No
III.) Did you settle with the Trustee? Yes No
\tDid you make a payment to the Trustee for the benefit of the bankruptcy estates to settle with the Trustee? Yes No \tAmount $___________
IV.) List any additional payments to the trustee as a result of any mortgage foreclosed, sold, or repaid as a condition of your settlement. Example: Agreed to split proceeds 80/20 with Trustee.
\t1. ___________________________________________\t\tAmount $________________
\t2. ___________________________________________\t\tAmount $________________
\t3. ___________________________________________\t\tAmount $________________
\t4. ___________________________________________\t\tAmount $________________
\t5. ___________________________________________\t\tAmount $________________
\tPost settlement payments to Trustee \t\t\tAmount $________________
V.) Did you retain 100% ownership of any mortgages as a result of settlement? Yes (list below) No
\t1. __________________________________________\t\t\tAmount $_______________
\t2. ___________________________________________\t\tAmount $_______________
\t3. ___________________________________________\t\tAmount $_______________
\t4. ___________________________________________\t\tAmount $_______________
\t5. ___________________________________________\t\tAmount $_______________
\tTotal Retained 100% ownership\t\t\t\t$________________
VI.) List any payment from the Trustee on any mortgage he or she foreclosed on, sold, or received repayment of principle and from which proceeds were agreed to be split with you as a result of settlement.
\t1. ___________________________________________\t\tAmount $________________
\t2. ___________________________________________\t\tAmount $________________
\t3. ___________________________________________\t\tAmount $________________
\t4. ___________________________________________ \t\tAmount $________________
\t5. ___________________________________________\t \tAmount $________________
\tTotal Split Proceeds received from Trustee post settlement $________________
VII.) Final Distribution of Bankruptcy Estate by Trustee received by you $______________
VIII.) Total Interest received from FRM or CL&M January 2006
\tthrough November 2009 $ _____________
\t(attach form 1040 and Schedule B, Interest and Dividends, for 2006-2009)
Calculate Loss:
\t\t\tA.\t\tTotal Section I. Proof of Claim\t\t\t\t\t$______________
\t\t\t\t\tTotal Section III. Settlement Payment \t\t\t$______________
\t\t\t\t\tTotal Section IV. Proceed split payment to Trustee \t$______________
\t\t\t\t\t\t\t\tTotal A. \t\t$______________
\t\t\tB.\t\tTotal Section V. 00% Retained Mortgages \t\t\t$______________
\t\t\t\t\tTotal Section VI. Proceed Split receipt from Trustee\t$______________
\t\t\t\t\tTotal Section VII. Final Distribution from Trustee\t\t$______________
\t\t\t\t\tTotal Section VIII. Interest Received\t\t\t$______________
\t\t\t\t\tTotal of any other awards not otherwise accounted for\t$______________
\t\t\t\t\t\t\t\tTotal B. \t\t$______________
\t\tC. \t\tTotal A minus Total B.
\t\t\t\t\t\t\t\tAllowable Loss\t\t$______________
Signature____________________________
Date_____________________
Signed under penalty of perjury
For administration purposes only
Grand Total All Losses submitted \t\t\t\t\t$______________
\t(name)__________________ allowable loss submitted\t\t\t$______________
Percent of Grand Total submitted\t_______________%
\t\tII. The complete application shall be received not more than 180 days after the effective date of this section. An extension of time may be granted for good cause shown by the claimant. However, an application that is received more than 270 days after the effective date of this section shall not be accepted. The attorney or administrator shall send a notice regarding the process for recovery under this chapter to the last known address of potential claimants.
\t\tIII. All applications filed in compliance with this chapter shall be accepted. Processing of an application shall begin upon receipt of a complete application. All applications shall be reviewed by the attorney or administrator to ensure that the applications are complete. If an application is not complete, it shall be returned to the claimant with a brief statement of the additional information required. The application shall be denied if the applicant does not furnish additional information or additional time is not granted for good cause.
\t\tIV. The attorney or administrator shall determine the amount of loss of original investments, if any, of each claimant and the pro rata share to be distributed to a claim demonstrating loss.
\t\tV. Recovery assistance shall be limited to 50 cents on each dollar lost on the amount of the claimant’s original investment.
\t\tVI. The attorney or administrator may consider individual claims filed by persons owning a joint interest that was subject to loss due to the Financial Resources Mortgage fraud, but any recovery awarded shall only be to the extent of each individual claimant’s original investment.
\t359-P:6 Awards Under This Chapter Set Off Against Any Other Recovery.
\t\tI. The amount of any award made under this chapter shall be set off against any other recovery sources, including, but not limited to awards from private suits, arbitration, bankruptcy court awards or settlements, or other sources of recovery.
\t\tII. In the event a qualifying claimant receives an award from a recovery source listed in paragraph I subsequent to the filing of a claim under this chapter, the claimant shall immediately notify the committee of the award. The attorney or administrator shall then modify the claimant’s award and pro rata share by offsetting such award against the claimant’s award under this chapter.
\t359-P:7 Recovery Assistance Prohibited. Recovery assistance shall not be awarded if the attorney or administrator for the committee determines the claimant:
\t\tI. Sustained the monetary injury as a result of participating or assisting in or attempting to commit or committing financial fraud with Financial Resources Mortgage; or
\t\tII. Profited or would have profited from the financial fraud of Financial Resources Mortgage.
\t359-P:8 Award Not Subject to Other Processes. An award made under this chapter shall not be subject to execution, attachment, garnishment, or other process. A claimant convicted of forgery, fraud, or deception in connection with a claim under this chapter shall forfeit an award paid to the claimant under this chapter. The attorney general may file a civil action to recover funds against such a claimant.
\t359-P:9 Liability of State. The state shall not be liable for any written determination made under this chapter except to the extent that money is available in the fund on the date the award is computed.
\t359-P:10 Claims Prior to January 1, 2006. Claims for restitution assistance shall not be accepted for any losses that occurred prior to January 1, 2006 due to financial fraud.
\t2 New Subparagraph; FRM Victims Contribution Recovery Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (330) the following new subparagraph:
\t\t\t\t(331) Moneys deposited under the FRM victims’ contribution recovery fund, established in RSA 359-P:2.
\t3 Repeal. The following are repealed:
\t\tI. RSA 359-P, relative to a recovery fund for victims of the Financial Resources Mortgage (FRM) fraud.
\t\tII. RSA 6:12, I(b)(331), relative to the FRM victims’ contribution recovery fund.
\t4 Contingent Repeal. Section 3 of this act shall take effect on the date the FRM victims’ contribution recovery fund committee certifies to the secretary of state and the director of the office of legislative services that the last payment was made in accordance with RSA 359-P as inserted by section 1 of this act. Any moneys in the FRM victims’ contribution recovery fund established in RSA 359-P:2 as inserted by section 1 of this act shall lapse to the general fund.
\t5 Effective Date.
\t\tI. Section 3 of this act shall take effect as provided in section 4 of this act.
\t\tII. The remainder of this act shall take effect 60 days after its passage.
\t\t\t\t\t\t\t\t\t\t\t\t\tLBAO
\t\t\t\t\t\t\t\t\t\t\t15-0332
\t\t\t\t\t\t\t\t\t\t\tAmended 3/1/16
SB 155-FN-A- FISCAL NOTE
AN ACT\t(New Title) establishing the Financial Resources Mortgage (FRM) victims' contribution recovery fund for victims of the FRM fraud and continually appropriating a special fund.
FISCAL IMPACT:
The Office of Legislative Budget Assistant states this bill, as amended by the House (Amendment #2015-2504h), may increase state restricted revenue and expenditures by an indeterminable amount in FY 2017 and each year thereafter. There will be no impact on county or local revenue and expenditures.
The Departments of Justice and State state this bill, as amended by the House (Amendment #2015-2504h), will have no fiscal impact on either department.
This bill establishes a continually appropriated, nonlapsing dedicated fund.
METHODOLOGY:
The Office of Legislative Budget Assistant states this bill establishes a fund consisting of state, public, and private sector gifts and contributions. To the extend contributions are made to the fund, there would be an increase in restricted revenue and expenditures. The amount of such contributions and expenditures cannot be projected.
The Department of Justice states this bill would create the FRM victims’ contribution recovery fund, which would be funded by gifts and contributions. A committee comprised of legislators would accept applications for restitution and payments would be made annually. The Department indicates the bill authorizes it to file a civil action against a person found guilty of forgery or deception in connection with an award paid from the fund, to recover those funds. The Department assumes the bill would not have a fiscal impact as it would result in no more than one civil action per year which could be performed within the current budget.
The Department of State, Bureau of Securities Regulation indicates the bill, as amended would have no fiscal impact on the Bureau or the revenue collected by the Bureau for deposit in the general fund.