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Fraud Enforcement and Recovery Act of 2009

Floor Speech

By:
Date:
Location: Washington, DC


FRAUD ENFORCEMENT AND RECOVERY ACT OF 2009 -- (House of Representatives - May 06, 2009)

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Mrs. BIGGERT. I thank the gentleman for yielding and thank him for managing the bill. I would also like to thank Chairman Conyers, Ranking Member Smith and their staffs, in particular Caroline Lynch, Allison Hallataei, Zachary Somers, Rob Reed, and my designee for the Financial Services, Nicole Austin, for their work on this bill, Senate 386, the Fraud Enforcement and Recovery Act.

I urge my colleagues to support this amended version.

I was pleased to be an original co-sponsor of the House version of this bill, H.R. 1748, the Fight Fraud Act, which is the substitute language to the underlying bill. I am also pleased that the bill includes language from my bill, H.R. 78, the Stop Mortgage Fraud Act, to provide additional funds to the FBI and Department of Justice to investigate and prosecute mortgage fraud.

A couple of years ago, the Chicago Tribune published a series that revealed that gangs in the Chicago area were increasingly turning toward mortgage fraud. They found it more lucrative than selling drugs. It turns out the gangs were not alone. Everyone, it seems, was in on the act.

In March, the U.S. Attorney in Chicago, Patrick Fitzgerald, brought mortgage fraud indictments against two dozen players. They are brokers, accountants, loan officers and processors and attorneys.

Mortgage fraud comes in all shapes and sizes. Scam artists inflated appraisals, flipped properties and lied about information, including income and identity, on loan applications. Some used the identity of deceased people to obtain mortgages. And other desperate thieves bilked out of their homes and home equity the most vulnerable homeowners and seniors in dire financial straits.

Let's face it: This is just the tip of the iceberg, which is why H.R. 1728, the mortgage reform bill, also under consideration today, is an important bill. And as we in Congress work to get the economy back on track and credit flowing again, we have to address what was the root of the mortgage meltdown in the first place, mortgage fraud.

Mortgage fraud continues to rise in record numbers. The FBI has reported that in 5 years, the mortgage fraud caseload increased 237 percent, and investigations more than doubled in 3 years, reaching over 63,000 reports in 2008. For the fifth year in a row, Illinois secured a spot, number three this year, on the top 10 list of States with the most severe and prevalent incidents of mortgage fraud.

As a former real estate attorney and member of the House Financial Services Committee, I have seen firsthand the devastating effect of mortgage fraud. It has plagued our financial system and economy. Most tragically, it has cost millions of Americans families their homes and required taxpayers to commit trillions of their hard-earned dollars to prop up the financial industry. It is not fair to the good actors in the industry and the 90 percent of homeowners who are paying their mortgages on time.

Congress can help to inject certainty and fairness into the mortgage system--to restore investor, homeowner, and public confidence in the American Dream and our financial system.

As we work to modernize financial laws and regulations, it is our duty to supply Federal law enforcement with the tools and resources it needs to rapidly tackle fraud, particularly mortgage fraud. Fighting fraud must play a central role in solving the underlying problems that have undermined economic recovery.

With that, I urge my colleagues to support this amended version of Senate 386.

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