[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H. Con. Res. 85 Introduced in House (IH)]

112th CONGRESS
  1st Session
H. CON. RES. 85

  Expressing the sense of the House of Representatives regarding the 
   proposed settlement between the Department of Justice, the State 
attorneys general, and mortgage servicers regarding mortgage fraud and 
                          the economic crisis.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 3, 2011

  Ms. Baldwin (for herself, Mr. Higgins, Mr. Towns, Mr. Tierney, Mr. 
  Hinchey, Ms. Lee of California, Ms. Schakowsky, Mr. Cicilline, Ms. 
    Kaptur, Mr. Grijalva, Mr. Jackson of Illinois, Ms. Woolsey, Mr. 
   McDermott, Mr. Stark, Mr. Thompson of California, Ms. Matsui, Mr. 
 Hastings of Florida, Mr. Holt, Ms. Moore, Mr. McGovern, Ms. Tsongas, 
 Mr. Ellison, Mr. Cohen, Mr. Larson of Connecticut, Mr. Cummings, Mr. 
   Kucinich, Mr. Gutierrez, and Mr. Conyers) submitted the following 
   concurrent resolution; which was referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                         CONCURRENT RESOLUTION


 
  Expressing the sense of the House of Representatives regarding the 
   proposed settlement between the Department of Justice, the State 
attorneys general, and mortgage servicers regarding mortgage fraud and 
                          the economic crisis.

Whereas the United States has experienced a mortgage crisis since 2004;
Whereas the mortgage crisis resulted from a number of causes in the housing and 
        credit markets, including an increase in non-traditional mortgages such 
        as risky subprime loans, substandard underwriting practices by lenders, 
        and unstable risk-management practices;
Whereas, since 2006, more than 3,000,000 houses in the United States have been 
        recaptured through foreclosure;
Whereas the rate of foreclosures has increased an additional 23 percent since 
        2008, with approximately 2,900,000 home mortgages in the United States 
        in foreclosure in 2010;
Whereas homeowners across the Nation have been hit hard by the mortgage crisis 
        with one in four homeowners ``underwater'' on their mortgages, meaning 
        that their home is worth less than the outstanding balance due on the 
        mortgage on the property;
Whereas underwater homeowners nationwide owe, in aggregate, approximately $750 
        billion more than their homes are currently worth;
Whereas the ongoing housing crisis and significant increase in mortgage 
        delinquencies and foreclosures has contributed to the current financial 
        crisis;
Whereas the Federal Bureau of Investigation (FBI) has stated that ``mortgage 
        fraud is a growing crime threat that is hurting homeowners, businesses, 
        and the national economy'';
Whereas the FBI has increased its investigative resources to address the 
        mortgage fraud crisis;
Whereas the FBI experienced an increase in suspicious activity reports filed by 
        federally insured financial institutions from 6,936 reports in 2003 to 
        67,190 in 2009;
Whereas investigations by the FBI and other law enforcement entities, including 
        State attorneys general, have focused on fraud related to loan 
        origination, mortgage loan securitization, and mortgage servicing;
Whereas, in the fall of 2010, reports nationwide exposed fraudulent foreclosure 
        filings, including the practice of signing mortgage documents without 
        verifying the content of the document, often referred to as ``robo-
        signing'';
Whereas the attorneys general of the 50 States initiated an official 
        investigation into the robo-signing scandal in October 2010;
Whereas the State attorneys general and the Federal Government have pursued a 
        settlement with mortgage servicers, including Bank of America, JPMorgan 
        Chase, Ally Financial, and Wells Fargo, that exceeds the original goal 
        of addressing the robo-signing scandal;
Whereas financial institutions have faced lawsuits regarding their role in the 
        subprime mortgage boom and accompanying financial crisis;
Whereas Bank of America has reached an agreement to pay $8.5 billion to settle 
        claims over purchases of mortgage-backed securities by Countrywide 
        Financial, which is owned by Bank of America;
Whereas the $8.5 billion settlement with Bank of America represents only 2 
        percent of the $424 billion in mortgages that Countrywide issued and 
        only 4 percent of the outstanding principal on the loans;
Whereas the Federal Housing Finance Agency has sued a group of banks, including 
        Bank of America, Citigroup, JPMorgan Chase, and Barclays, for $200 
        billion for losses resulting from mortgage-backed securities;
Whereas the Federal Housing Finance Agency lawsuit pertains to loans sold to the 
        Federal National Mortgage Association (Fannie Mae) and the Federal Home 
        Loan Mortgage Corporation (Freddie Mac) that were based on incorrect or 
        missing information;
Whereas Fannie Mae and Freddie Mac neared insolvency in 2008 due to subprime 
        mortgage losses, were rescued by United States taxpayers, and have 
        operated under Federal conservatorship since 2008;
Whereas State pension funds were cheated out of critical investments due to 
        fraudulent sales of mortgage-backed securities;
Whereas the fraudulent sales of mortgage-backed securities has resulted in 
        financial losses for State's worker retirement funds, whose investors 
        and beneficiaries include teachers, firefighters, and police;
Whereas securities fraud lawsuits have been filed on behalf of beneficiaries of 
        State pension funds, including a class action lawsuit against Merrill 
        Lynch, now owned by Bank of America, for providing misleading documents 
        for $16.5 billion in certificates;
Whereas banks are required to register and pay fees with county offices in each 
        State for each sale or resale of a mortgage;
Whereas many banks utilized the Mortgage Electronic Registration Systems (MERS) 
        electronic mortgage registry, which permitted these financial 
        institutions to repeatedly avoid paying local taxes;
Whereas local communities lost local tax revenue through the banks' fraudulent 
        behavior and local counties are now suing to reclaim the significant 
        amount of lost revenue;
Whereas the proposed settlement between the State attorneys general, the Federal 
        Government, and mortgage servicers is reported to be for $20 billion;
Whereas the financial repercussions for the victims of the mortgage servicers' 
        fraudulent behavior, including homeowners, State pension beneficiaries, 
        and local communities, far exceeds $20 billion;
Whereas reports of the proposed settlement describe that the settlement may halt 
        State investigations and prosecutions into the mortgage servicers' 
        fraudulent behavior;
Whereas the prevention of future fraudulent behavior would be aided by examining 
        the findings of investigations into past such behavior;
Whereas California Attorney General Kamala Harris has withdrawn from the 
        proposed settlement due to concerns that the proposed settlement amount 
        was insufficient; and
Whereas New York Attorney General Eric Schneiderman has resisted requests to 
        halt New York State investigations into mortgage fraud as a condition of 
        joining the settlement: Now, therefore be it
    Resolved by the House of Representatives (the Senate concurring), 
That it is the sense of the House of Representatives that any action 
taken by the Department of Justice should be consistent with the 
following goals:
            (1) The mortgage servicers who engaged in fraudulent 
        behavior should not be granted criminal or civil immunity for 
        potential wrongdoing related to illegal mortgage and 
        foreclosure practices.
            (2) The Federal Government and State attorneys general 
        should proceed with full investigations into claims of 
        fraudulent behavior by mortgage servicers.
            (3) Any financial settlement reached with mortgage 
        servicers should appropriately compensate for, and accurately 
        reflect, the extent of harm to all victims, including 
        homeowners and State pension beneficiaries, caused by the 
        mortgage servicers' fraudulent behavior.
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