STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
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By Mr. OBAMA (for himself, Mr. DURBIN, and Mr. MENENDEZ):
S. 2280. A bill to stop transactions which operate to promote fraud, risk, and under-development, and for other purposes; to the Committee on Banking, Housing, and Urban Affairs.
Mr. OBAMA. Mr. President, today, I am introducing new legislation to address a growing problem in our country, one that is robbing thousands of Americans of their dream of homeownership, and costing the mortgage industry hundreds of millions of dollars each year.
I am talking about the problem of mortgage fraud--the practice of defrauding individuals of their rightful property, and using tricks and schemes to steal from banks and other financial institutions. Mortgage fraud comes in a variety of forms, from inflated appraisals to the use of straw buyers, but the net result is the same: financial institutions lose out to the tune of approximately $1.01 billion each year, and consumers lose their savings, their good credit, and their homes.
Although the data in this area is limited, mortgage fraud is clearly on the rise. According to the FBI, mortgage fraud cases were up 25 percent last year, and 400 percent since 2002. Further, in 2004, the mortgage industry noted 12,000 cases of suspicious activity, three times the amount reported in 2001. This is due largely to the housing boom which is driving up housing prices across the country. Nearly $2.5 trillion in mortgage loans were made during 2005, and the number is only expected to rise this year.
But mortgage fraud is about more than just dollars and statistics; it's about real people, real homes, and real lives. My hometown Chicago Tribune has featured a series of articles about mortgage fraud in Illinois, which, along with Georgia, South Carolina, Florida, Missouri, Michigan, California, Nevada, Colorado and Utah, is among the FBI's top-ten mortgage fraud `hot spots.'
The stories highlight, for example, the plight of the good folks on May Street in Chicago, who saw a block's worth of homes go boarded up in the span of a just few years, as swindlers racked up hundreds of thousands of dollars in bad loans, and left shells of houses behind. The Tribune stories highlighted the plight of 75-year-old Ruth Williams, who had to spend her personal funds to clear the title to her home after fraudsters secured $400,000 in loans on three buildings they didn't own. And two doors down from Ms. Williams, Corey Latimer can't sell his building or borrow against it, because a lending company hasn't released a phony mortgage that Corey didn't authorize.
Law enforcement, consumer groups and many in the mortgage industry are doing what they can to combat fraud, and I applaud their good work. Now, Congress needs to come to the table and do its part.
I, along with Senator Durbin and Senator Menendez, am introducing the STOP FRAUD Act today to address the critical problem of mortgage fraud. STOP FRAUD (Stopping Transactions which Operate to Promote Fraud, Risk and Under-Development) would provide the first Federal definition of mortgage fraud and authorize stiff criminal penalties against fraudulent actors. STOP FRAUD requires a wide range of mortgage professionals to report suspected fraudulent activity, and gives these same professionals safe harbor from liability when they report suspicious incidents. It also authorizes several grant programs to help State and local law enforcement fight fraud, provide the mortgage industry with updates on fraud trends, and further support the Departments of Treasury, Justice and Housing and Urban Development's fraud-fighting efforts.
The STOP FRAUD Act will build upon the good work of the FBI, the Treasury Department, HUD, consumer groups, many in the mortgage industry, and State and local law enforcement, giving them the tools they need to stop mortgage fraud in its tracks. The cost of this bill is well worth the benefit to American taxpayers and companies, and it has been endorsed by a range of law enforcement and consumer groups. The Illinois Attorney General's office and the Chicago Police Department have told me how valuable this bill would be to their enforcement efforts, and ACORN, the Center For Responsible Lending, the National Association of Consumer Advocates, the National Community Reinvestment Coalition, National Consumer Law Center, and U.S. PIRG said in a recent letter that this bill would ``help protect consumers from fraudulent and abusive practices in the mortgage industry.''
The STOP FRAUD Act is a tough, cost-effective, and balanced way to address the serious problem of mortgage fraud in our country. I urge my colleagues to join me in this important effort.
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By Mr. OBAMA (for himself and Mr. Bayh):
S. 2286. A bill to amend part A of title IV of the Social Security Act to eliminate the separate work participation rate for 2-parent families under the temporary assistance for needy families programs; to the Committee on Finance.
Mr. OBAMA. Mr. President, I rise today to speak about the ``Equality for Two-Parent Families Act of 2006'' that I am introducing with Senator Bayh. When Congress reauthorized the Temporary Assistance for Needy Families program as part of the Spending Reconciliation bill two weeks ago, we failed to eliminate a pernicious disincentive to marriage that was contained in that bill. The Equality for Two-Parent Families Act will correct that unfortunate error.
Republicans and Democrats often have different ideas about how best to promote self sufficiency and economic mobility for low-income families. But one thing on which we all can agree is that children are better off when they grow up with two responsible parents.
The evidence shows that, on average, children in two-parent families do better in school and are more likely to lead successful, independent lives. That is why recent TANF legislation, including the bipartisan PRIDE Act in the Senate and H.R. 240 in the House, and Administration proposals have recognized that the separate two-parent work participation standard, which introduces an anti-marriage bias in TANF, should be eliminated.
Unfortunately, the recent TANF reauthorization failed to reflect this long-standing consensus. Instead, the new law compels States to meet an unequal work participation standard with their own State-funded programs. Whereas States must ensure that 50 percent of their single parents satisfy the work requirements, they will be penalized if fewer than 90 percent of their two-parent families meet what are even greater work requirements.
As a result, many States, including Illinois which until now has successfully served two-parent families in its state program, may now face an unfortunate choice: stop serving two-parent families or face a penalty. I even heard one welfare official joke that States may be better off paying couples to split up in order to avoid possible penalties. What kind of incentive is that?
Requiring States to treat two-parent families differently undermines efforts on both the state and federal level to promote and strengthen two-parent families. It is especially ironic that the policy is part of a bill that includes funding for marriage promotion and fatherhood programs.
The remedy for this contradiction is clear; we must eliminate the separate two-parent work participation standard. Senator Bayh and I have introduced the ``Equality for Two-Parent Families Act of 2006'' to eliminate this standard and rectify the inequity in current TANF policy. Our bill does not change two-parent work requirements or interfere with State efforts to promote employment and reduce caseloads. Instead, our bill reinforces State efforts to support two-parent families in the ways that they know best.
I urge my colleagues to support this legislation and join us in promoting stronger families. Thank you for your attention to this important matter.