Senate Seeks Legislation Protecting Homeowners Against Mortgage Fraud
Hundreds of FBI agents and federal prosecutors could be hired to investigate the estimated 5,000 mortgage fraud claims that are reported every month if a new Senate bill becomes law, reports The Associated Press (‚ÄúSenate Votes to Hire Hundreds More FBI Agents, Prosecutors to Tackle Mortgage Fraud Cases,‚ÄĚ April 28, 2009).
‚ÄúAs foreclosures menace more and more hardworking homeowners, they become more desperate for help,‚ÄĚ said Senate Majority Leader Harry Reid, D-Nev. ‚ÄúUnfortunately, schemers, swindlers, and scam artists are all too happy to pounce.‚ÄĚ
To protect homeowners from such scams, the proposed legislation would allow the government to hire 160 special FBI agents dedicated to investigating mortgage fraud, along with 200 support staff. According to current data, despite the doubling of caseloads in the last three years, the FBI has fewer than 250 special agents devoted to financial fraud cases.
Under the proposal, the Justice Department would also be allowed to hire an additional 200 prosecutors and civil enforcement attorneys as well as 100 support staff.
Although the bill ‚ÄĒ sponsored by Sens. Patrick Leahy, D-Vt., and Chuck Grassley, R-Iowa ‚ÄĒ may end up costing more than $265 million a year for the next two years, supporters, including President Obama, say that the legislation would more than pay for itself, reports The Associated Press. Regulators anticipate that the large number of fines and penalties that would result from more aggressive government investigations would subsidize the new legislation.
If approved, the measure would go into effect beginning Oct. 1, 2009, and would cover the 2010 and 2011 budget years.
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