An increasing number of Michigan residents tapping the equity in their homes to pay overdue bills and maintain their lifestyle during rocky economic times are becoming victims of mortgage fraud, costing them thousands of dollars -- and sometimes even the roof over their heads.

A package of bills unveiled Monday would offer people refinancing their homes more protection from lenders who are defrauding the real estate industry by giving law enforcement officials more muscle to investigate and prosecute such cases.

The state has one of the fastest-growing mortgage-fraud problems in the nation, according to the FBI. Michigan's mortgage-fraud losses jumped from nearly $9 million in 2003 to $26 million in 2005.

The bills presented by Republican state Reps. Fran Amos of Waterford, Rick Baxter of Concord and Jim Marleau of Lake Orion would make mortgage fraud a felony, reallocate $3 million in broker fees to the attorney general for the investigation and prosecution of fraud and prevent appraisers from modifying appraisals in exchange for business.

"I'd like for them to do whatever they have to do to make these people pay for what they're doing to us," Rosalie Seay, 78, of Pontiac said Monday. She and her husband, Claude, 82, believe they are mortgage-fraud victims.

The Seays, who owned four investment properties in Pontiac, said they thought they were refinancing the homes last August to make improvements on them and to help pay for their son's medical bills after he developed a brain tumor.

Instead, they said, they unknowingly signed over their homes using a blank quit-claim deed later filled in by a company that Rosalie Seay said she either found in the phone book or saw on television.

Now the Seays are trying to get their homes back and have made repeated appearances in Oakland County Circuit Court trying to prove that they were duped out of at least $300,000. The next court date is scheduled for November; the FBI also is investigating.

Getting tough on fraud

Key points of the proposed legislation: