Industry NewsMortgage

Lawmakers turn attention to mortgage fraud

Bill would tighten laws, beef up enforcement

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As the government ramps up to spend trillions of dollars to revive the economy, loopholes in federal law and a shortage of FBI agents assigned to investigate white-collar crime could lead to a big payday for perpetrators of mortgage fraud and other schemes. That's the view of lawmakers who want to extend federal fraud laws to private mortgage companies that aren't regulated at the federal level, and provide $155 million a year to the U.S. Justice Department to triple the number of active mortgage-fraud task forces and help the FBI rebuild its white-collar investigation program. Senate Bill 386, The Fraud Enforcement and Recovery Act, is aimed at deterring fraud among not only mortgage originators, but the Wall Street financiers who securitized and sold mortgages to investors, said the bill's sponsor, Sen. Patrick Leahy, D-Vt. The bill is also intended to protect the $700 billion Troubled Asset Relief Program (TARP) from fraudulent schemes. In the wake of the savings-and-l...