Senate Passes Mortgage Fraud Bill

The U.S. Senate approved a bill this week that will give federal investigators new resources and additional funding to combat mortgage crimes and housing scams. According to officials, an estimated 5,000 new mortgage fraud cases are reported every month.
The new legislation - approved by a bipartisan vote of 92-4 - authorizes $265 million to hire fraud prosecutors and increase enforcement actions. Lawmakers anticipate the funds will give the Federal Bureau of Investigations (FBI) an additional 160 special agents and more than 200 support staff, including forensic analysts. Currently, the FBI has less than 250 special agents assigned to its mortgage and financial fraud units, despite the fact that these types of cases have more than doubled in the past three years.
Under the bill, the Justice Department would also hire 200 more prosecutors and civil enforcement attorneys, as well as 100 support staff. The Securities and Exchange Commission (SEC), Secret Service, Postal Inspection Service, and the inspector general for HUD would also receive some of the federal funding.
According to an _Associated Press_ report, supporters of the bill, including President Barack Obama, say the legislation would more than pay for itself because of the added fines and penalties raked in from more aggressive government investigations.
Senate Majority Leader Harry Reid (D-Nevada) commented, ""This housing crisis is the root of our larger economic crisis. While we're working to help the millions of desperate homeowners who need to modify their mortgages, countless swindlers are working to take advantage of them. And the way the system works now, we can't keep up.""
Lawmakers also approved an amendment to the fraud bill that would create two independent commissions with subpoena power to examine factors which contributed to the nation's financial crisis. One panel would be made up of outside authorities and the other would be made up of seven senators. Officials said the initiative would be similar to the September 11 Commission, which investigated the 2001 attacks on New York and Washington.
The House Financial Services Committee also spent this week marking up its own mortgage reform bill, aimed at the predatory lending practices and subprime mortgage loans that analysts say led the nation into its economic downturn. Committee members expect to bring the legislation to the full House as early as next week.