[Congressional Record Volume 154, Number 150 (Monday, September 22, 2008)]
[House]
[Pages H8517-H8519]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            NATIONWIDE MORTGAGE FRAUD TASK FORCE ACT OF 2008

  Ms. SUTTON. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6853) to establish in the Federal Bureau of Investigation 
the Nationwide Mortgage Fraud Task Force to address mortgage fraud in 
the United States, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6853

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Nationwide Mortgage Fraud 
     Coordinator Act of 2008''.

     SEC. 2. ESTABLISHMENT IN THE FEDERAL BUREAU OF INVESTIGATION 
                   OF THE NATIONWIDE MORTGAGE FRAUD COORDINATOR.

       (a) Establishment.--The Director of the Federal Bureau of 
     Investigation shall assign the Chief of its Financial Crimes 
     Section, Criminal Investigative Division, in addition to 
     other assigned duties, to be the Nationwide Mortgage Fraud 
     Coordinator.
       (b) Duties of the Coordinator.--The Nationwide Mortgage 
     Fraud Coordinator shall oversee all Federal Bureau of 
     Investigation activities related to the investigation of 
     mortgage fraud, including the following:
       (1) Establishing and operating regional task forces, 
     consisting of the voluntary participation of Federal, State, 
     and local law enforcement and prosecutorial agencies, to 
     organize initiatives to investigate mortgage fraud, including 
     initiatives to enforce all pertinent Federal and State 
     mortgage fraud laws.
       (2) Providing training to Federal, State, and local law 
     enforcement and prosecutorial agencies with respect to 
     mortgage fraud, including related Federal and State laws.
       (3) Collecting and disseminating data with respect to 
     mortgage fraud, including, to the extent practicable, 
     Federal, State, and local data relating to mortgage fraud 
     investigations and prosecutions.
       (4) Preparing an annual report describing the Federal 
     Bureau of Investigation's efforts to combat mortgage fraud 
     and the results of these efforts. This report shall be 
     submitted by the Federal Bureau of Investigation to Congress. 
     The initial report shall be submitted no later one year after 
     the date of the enactment of this Act.
       (5) Making recommendations to the Director as to the need 
     for resources to combat mortgage fraud.
       (6) Performing other duties as assigned that are related to 
     the investigation and prosecution of mortgage fraud.
       (c) Optional Functions.--The Nationwide Mortgage Fraud 
     Coordinator shall have the following optional 
     responsibilities:
       (1) Establishing a toll free hotline and other information 
     systems for--
       (A) receiving reports of mortgage fraud;
       (B) providing the public with access to information and 
     resources with respect to mortgage fraud; and
       (C) directing reports or allegations of mortgage fraud to 
     the appropriate Federal, State, or local law enforcement and 
     prosecutorial agency, including any appropriate regional task 
     force.
       (2) Creating a database with respect to suspensions and 
     revocations of mortgage industry licenses and certifications 
     to facilitate the sharing of such information by States.
       (d) Optional Responsibility of the Department of Justice.--
     The Department of Justice, upon consideration of any 
     recommendations by the Nationwide Mortgage Fraud Coordinator, 
     may--
       (1) propose legislation to Federal, State, and local 
     legislative bodies to assist in the detection, investigation, 
     and prosecution of

[[Page H8518]]

     mortgage fraud, including measures to address mortgage loan 
     procedures and property appraiser practices that provide 
     opportunities for mortgage fraud; and
       (2) make recommendations to Congress as to the need for 
     additional resources to combat mortgage fraud.
       (e) Sunset.--This section shall sunset September 30, 2015.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Ohio (Ms. Sutton) and the gentleman from North Carolina (Mr. Coble) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from Ohio.


                             General Leave

  Ms. SUTTON. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Ohio?
  There was no objection.
  Ms. SUTTON. Mr. Speaker, I yield myself such time as I may consume.
  H.R. 6853, as amended, the Nationwide Mortgage Fraud Task Force Act, 
was introduced by Congressman Meek from Florida. H.R. 6853 directs the 
Federal Bureau of Investigation to designate a high-level official to 
coordinate mortgage fraud investigations.
  Mortgage fraud is one of the fastest-growing white-collar crimes in 
the United States. The FBI estimates that the number of cases grew from 
approximately 17,000 in 2004 to 46,000 in 2007.
  The losses from these crimes amount to billions of dollars spread 
among the financial institutions that have been struggling in the wake 
of the collapse of the real estate market.
  Beyond the direct harm to the defrauded lender, this crime has far 
wider ripple effects in our neighborhoods and in our national economy.
  In our neighborhoods, mortgage fraud has resulted in abandoned houses 
that cannot be easily resold because they are now owned by a bank and 
tied up in litigation. These houses often sit empty, deteriorating and 
becoming overgrown with weeds, an invitation to burglars or other 
criminal elements, and a blight on the entire neighborhood. In our 
economy, mortgage fraud has exacerbated the subprime loan crisis that 
is now having wide-spread effects on the entire financial system.
  Mortgage fraud can take many forms and may involve dishonest 
borrowers, appraisers, settlement agents, loan officers, brokers or 
other persons, including phony straw purchasers under the direction of 
others. These can be difficult, time consuming and resource-intensive 
cases to investigate and prosecute. This bill will help the FBI meet 
these challenges by directing it to appoint a nationwide mortgage fraud 
coordinator to coordinate the FBI's efforts.
  The coordinator would supervise regional task forces, coordinate 
investigations and facilitate appropriate training and information 
sharing. They would also prepare reports to assist Congress in 
undertaking any additional legislative response as may be warranted.
  This is an important bill that addresses an important issue facing 
our communities and our families. I urge my colleagues to support this 
important legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. COBLE. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 6853, the Nationwide Mortgage Fraud Task 
Force Act of 2008. I appreciate the willingness of my colleagues on the 
other side of the aisle to address some concerns that we had with the 
bill.
  However, I understand that despite improvements to the bill, there 
was a rush to bring it to the floor. The Judiciary Committee held no 
hearings or markups on the bill. At a minimum, the committee could have 
sought the input of FBI Director Mueller when he appeared before our 
committee last Tuesday. Unfortunately, however, we were not aware of 
the majority desire to move this legislation at that time.
  The subprime mortgage crisis has taken a toll on millions of 
Americans across the country. Inflated housing prices, combined with 
fluctuating mortgage interest rates, have left many homeowners 
struggling to make their monthly mortgage payments or, worse, facing 
foreclosure on their homes.
  Many factors have contributed to this crisis, including predatory 
lending by corrupt lenders, mortgage fraud and even foreclosure fraud. 
Estimated losses for mortgage fraud are between 4 and 6 billion 
dollars, with $813 million in losses in fiscal year 2007 alone.
  According to the Federal Bureau of Investigation, the western region 
of the United States led the Nation with 37 percent of mortgage fraud-
related reports filed during fiscal year 2007. States with the most 
significant mortgage fraud problems in 2008 include Florida, Nevada, 
Michigan, California, Utah, Georgia, Virginia, Illinois, New York and 
Minnesota. Other States significantly affected by mortgage fraud 
included Arizona, Maryland, Utah, Nevada, Missouri, Indiana, Tennessee, 
Virginia, New Jersey and Connecticut.
  Clearly this is a nationwide problem. The FBI has been actively 
investigating mortgage fraud since 1999. In his testimony before our 
Judiciary Committee last week, FBI Director Robert Mueller informed us 
that 42 FBI mortgage fraud task forces are currently handling 1,400 
mortgage fraud investigations across the country. This includes 24 
investigations into large-scale corporate fraud. The FBI's Operation 
Malicious Mortgage is an immense multiagency operation focused 
primarily on three types of mortgage fraud, lending fraud, foreclosure 
rescue schemes and mortgage-related bankruptcy schemes.
  As of June, this operation has nabbed more than 400 defendants, 173 
convictions, and 81 sentencings in crimes accounting for more than $1 
billion in estimated losses. Just last month, in my home State of North 
Carolina, four defendants were indicted in Federal court for using 
various fraud schemes, including inflated property values and false 
representations to lenders to secure financing for the purchase of 
property and mobile homes.
  H.R. 6853 lends additional support to the FBI for its mortgage fraud 
investigations and provides additional tools to State and local law 
enforcement. The bill designates the chief of the FBI's Financial 
Crimes Section as the nationwide mortgage fraud coordinator and directs 
her to oversee all mortgage fraud investigations, provide additional 
training to State and local law enforcement, and collect and report 
annual mortgage fraud data to the Congress.
  Again, I thank my colleagues for amending the bill to address our 
objections and concerns, and I urge my colleagues to support the bill.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SUTTON. Mr. Speaker, at this time it's my honor to yield 5 
minutes to the gentleman from Florida, the sponsor of this bill, Mr. 
Meek.
  Mr. MEEK of Florida. I want to thank the gentlewoman from the great 
State of Ohio for yielding to me and my good friend from North 
Carolina. Both of their explanations about H.R. 6853 are very accurate 
of the situation.
  Mr. Speaker, we have a number of Americans that are trying to get 
homes or tried to get homes, and we have individuals that are preying 
upon them. This is really one of the most egregious white-collar crimes 
that are out there right now.
  With this bill, it will give the FBI some direction in working with 
local law enforcement to bring about the kind of coordination we need 
in our country to be able to assist Americans or be able to save 
Americans from falling victim to mortgage fraud.
  In my community alone, in Miami-Dade County, there was a task force 
set up. Just last year, they were able to not only arrest 71 
individuals, but they were able to generate more cases because of the 
coordination they have and expertise that they have, but that's a 
metropolitan city. With this legislation, it will bring about the 
coordination of smaller police departments and also prosecutor offices 
that will be able to move faster on these mortgage crimes.
  Many of the Members have been given the statistics that have plagued 
our country thus far, but this legislation is very, very urgent. Right 
now, we are facing a crisis on Wall Street, but we have a number of 
Americans that are facing a crisis because they have been had by those 
that are out there preying upon them and that are coordinating 
themselves in a more detailed way than law enforcement at

[[Page H8519]]

this time. But we are catching up and legislation, like the legislation 
that is before us, will allow us to do so.
  I want to commend the FBI for what they have been able to do thus 
far. With this legislation, it will give even more focus to mortgage 
fraud.
  Also, I just want to state for the record that we have been in 
communication with the FBI. They are fully aware of this. I think the 
reason why we have an amendment, this bill has been amended, is the 
fact that the coordinator will serve better than just an overall task 
force that will create regional task forces, that will then come back 
to the Congress and give us some legislative ideas on how we can even 
pinpoint more efforts towards this particular crime.
  As you know, many, many Americans, many Americans have saved up their 
money to be able to purchase their first home. Many of these 
individuals that are out there coordinating to take their money, to 
take their life savings, to be able to take every little thing that 
they have punched in for and punched out for many, many years, some of 
them have taken the money their loved ones left for them once they have 
passed on to be able to buy that first home, and for them to be taken 
advantage of is one of the bad things that we look at in our society.
  We do know we have undesirables out there that are willing to prey on 
hardworking Americans. This legislation is urgent. It's right now for 
the moment.
  I am glad we are on the floor. I want to thank the chairman of the 
committee, and, also, our colleagues on the other side of the aisle, 
for working to push this legislation to passage here in the House and 
hopefully through the Senate and on to the President of the United 
States, so that we don't have to continue to see the number of victims, 
especially seniors and especially first-time home buyers, fall victim 
to these individuals that are out there.
  I ask for the Members to please support H.R. 6853, the legislation 
that would create a nationwide mortgage coordinator in the FBI.

                              {time}  1430

  Mr. COBLE. Mr. Speaker, I yield 3 minutes to the gentleman from 
Georgia (Mr. Broun).
  Mr. BROUN of Georgia. I thank the gentleman for yielding.
  Mr. Speaker, I believe that people who commit fraud should be held 
responsible at the highest degree. I think the greatest form of fraud 
that we have in America and has been part of the problem that has 
created this financial crisis is an act passed by Congress called the 
Community Development Act. This has created a system that people are 
fraudulently giving mortgages, but it has also created a system where 
groups, community development organizations such as Acorn are holding 
financial institutions hostage. They use threats, extortion and bribes 
to try to get these financial institutions to give loans to people who 
can't pay, and it has created a system in America that has caused a 
meltdown in our whole financial system.
  If we are going to start dealing with fraud in America, we need to 
start dealing with the greatest source of fraud, and the Community 
Development Act is one of those. We need to repeal the Community 
Development Act. We need to stop Acorn and other types of organizations 
like this from threatening our financial institutions. We need to put 
America back on a strong financial basis. Only by repealing the 
Community Development Act will we do so. We have to find solutions. We 
can't just play around the edges as we are doing now.
  We will be voting on a bill very shortly to try to bail out financial 
institutions in America. I am very skeptical of the bill, frankly. But 
we do know that there are some very inherent problems in bills that 
were passed by this House as well as the Senate and put into law.
  We need to repeal the Community Development Act as well as other acts 
such as that which have created this house of cards financially that is 
collapsing around our ears.
  Ms. SUTTON. Mr. Speaker, may I inquire how many more speakers the 
gentleman from North Carolina has.
  Mr. COBLE. I have no more speakers, and I yield back the balance of 
my time.
  Ms. SUTTON. I thank the distinguished gentleman from North Carolina.
  Mr. Speaker, H.R. 6853 is an important bill that addresses a large 
problem that is facing our communities and families. I urge my 
colleagues to support this important legislation.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Ohio (Ms. Sutton) that the House suspend the rules and 
pass the bill, H.R. 6853, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. BROUN of Georgia. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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