Industry News

MBA calls more laws to fight mortgage fraud unnecessary

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The Mortgage Bankers Association wants lawmakers to provide more funding for mortgage fraud prevention and prosecution, not pass new laws targeting the crime. Federal mail and wire fraud statutes already give law enforcement agencies the authority they need to combat mortgage fraud, the MBA maintains in a newly published position paper, and new laws could do more harm than good. According to The Mortgage Asset Research Institute (MARI), suspected mortgage fraud incidents were up 30 percent during 2006. A private risk management firm, The Prieston Group, projects mortgage fraud losses for the year could total $4.2 billion. But some proposals for fighting mortgage fraud -- such as creating a federal "private right of action" to provide victims a means of legal redress -- would only add to lenders' problems, the MBA argues. Overly broad statutes "could easily be abused in the hands of private litigants who may not exercise the same restraint as law enforcement personnel in p...