Obama reintroduces legislation on mortgage fraud
WASHINGTON, April 25 (Reuters) - Illinois Senator Barack Obama introduced legislation on Wednesday that would set a national standard for mortgage fraud and outline penalties for fraudsters.
In a statement, the Illinois Democrat and presidential hopeful said the legislation was needed as the housing market is shaken by failed mortgages among subprime borrowers with damaged credit.
"As the number of foreclosures skyrockets and the housing market becomes more vulnerable, we must establish stiff penalties to deter fraud and protect consumers against abusive lending practices," Obama said.
Obama introduced a version of the same bill in the last Congress in February 2006 but it made no headway in the Republican-controlled legislature.
The new legislation, co-sponsored by fellow Illinois Democrat Sen. Richard Durbin, would target anyone who uses false information to secure a property or sell a mortgage product.
It would require brokers, attorneys, lenders and other agents to report suspected fraud to the Secretary of the Treasury. Another feature would offer $25 million in mortgage fraud counseling to prospective and current homebuyers.
