Mortgage fraud bill goes to Obama to sign

By ANNE FLAHERTY
The Associated Press
Monday, May 18, 2009 7:21 PM

WASHINGTON -- Congress on Monday sent the president a bill to clamp down on mortgage fraud and set up a $5 million independent commission to investigate the cause of the worldwide financial meltdown.

President Barack Obama is expected to sign the legislation, which received broad bipartisan support. The House agreed on Monday to a Senate version of the bill by a 338-52 vote.

Obama and other supporters say the bill's estimated cost of some $265 million a year will more than pay for itself because of the fines and penalties that would result from increased government oversight.

"No one should want to see those who engaged in mortgage fraud escape accountability," said Sen. Patrick Leahy, D-Vt.

Also this week, Democratic leaders hope to send Obama legislation on credit cards that would protect consumers from arbitrary rate hikes. Another measure that could make it to the president's desk would try to make it easier for homeowners with shaky credit to switch to a lower-cost mortgage backed by the government.

Leahy, chairman of the Senate Judiciary Committee, co-sponsored the mortgage fraud bill with Sen. Chuck Grassley, R-Iowa. They estimate the money could hire about 160 special FBI agents and more than 200 support staff, including forensic analysts. Currently, the FBI has fewer than 250 special agents assigned to mortgage fraud cases, despite caseloads that have more than doubled in the past three years.

The Justice Department could hire 200 more prosecutors and civil enforcement attorneys, along with 100 support staff.

Other government entities in line to receive money include the Securities and Exchange Commission, the Secret Service, Postal Inspection Service and the inspector general for the Housing and Urban Development Department.

The bill also would establish a new "financial markets commission." Sens. Johnny Isakson, R-Ga., and Kent Conrad, D-N.D., proposed creating the group to "examine all causes, domestic and global" of the economic crisis.

Democrats would hold sway on the panel, with the majority party able to pick six members and Republicans to pick four. In a bid to ensure the panel is apolitical, members of government are not allowed to participate and at least one Republican-appointed panel member must sign off on subpoenas issued by the group's Democratic-appointed chairman.

The commission will focus on more than 20 areas, including how the government failed to protect investors and the role financial fraud may have played in the meltdown. The group would report its findings by Dec. 15, 2010.