edited title for accuracy - ed

Long overdue.

Chicago Tribune:

Sen. Barack Obama (D-Ill.) proposed a sweeping set of federal reforms Tuesday to combat mortgage fraud, ratcheting up enforcement and creating a national database of brokers who have been disciplined.

Obama's bill would increase funding for federal law enforcement programs, create new criminal penalties for mortgage professionals found guilty of fraud and require industry insiders to report suspicious activity.

Mortgage fraud is "robbing thousands of Americans of their dream of homeownership, and costing the mortgage industry hundreds of millions of dollars each year," Obama said. "Congress needs to come to the table and do its part."

Currently, neither lenders nor consumers have a systematic way to review brokers who have been sanctioned, having to rely instead on disparate sources from state banking departments for public notices. The new legislation would create a single database whereby lenders and consumers could check to see if a particular mortgage broker is a worthy originator.

The original Chicago Triune investigative report which uncovered the growing problem of drug dealing gangs scamming low-income families, and spurred the Illinois Senators to action can be found here: Mortgage Fraud: The New Street Hustle.

Tags: mortgage fraud legislation fbi