The U.S. Congress has passed a bill that will allocate $532 million for the fight against forclosed houses and securities fraud. The bill has been sent to President Barack Obama for approval.
If approved, the bill would increase the size of the Federal Bureau of Investigation's (FBI) staff for its mortgage fraud investigation. It would also permit the federal government to hire additional prosecutors, analysts and special agents to go after corporate and housing financial fraud.
The main aim of the bill is to clamp down on forclosed houses scammers who take advantage of the desperation of homeowners facing the threat of foreclosures.
According to Senator Ted Kaufman, who co-sponsored the bill, people are concerned about the spread of foreclosure prevention scams. He pointed out the need for the federal government to address the fraud problem and to spare no one in its effort to go after scammers, whether they are working in the bank or stock market.
Meanwhile, Senate lawmakers are encouraging support for the measure which they claimed would be used to monitor and investigate big financial institutions.
Already, criminal fraud investigations have been conducted on companies that reportedly received huge amounts of bailout funds. Those who are leading the criminal fraud investigations are the FBI, the special inspector general of the Department of Treasury, Securities and Exchange Commission and the New York attorney general.
On the other hand, the $532 million funding is expected to have a significant impact on home loan fraud scams that are flooding the country. According to federal agencies, they are swamped with foreclosed houses fraud cases. Added to this, they are monitoring a new fraudulent activity from those who are offering home loan refinancing.
According to FBI's chief of financial crimes unit, Sharon Ormsby, mortgage loan fraud cases continue to rise despite a significant decline in the number of mortgage loans issued recently.
The FBI handled about 2,300 mortgage loan fraud cases since November 2008, representing an almost 100 percent increase from the number of cases in 2007.
Ormsby also disclosed that the FBI has almost doubled the number of agents it assigned to deal with mortgage loan fraud cases.
Civil and criminal investigators claimed that scam artists have taken advantage of Obama's program to help borrowers avoid foreclosure. To combat this problem, several federal agencies launched a coordinated effort to fight fraudulent forclosed houses prevention activities.
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