The implosion of the subprime lending industry threatens to bring foreclosure to over two

million households, including many families with children. Barack Obama has been
closely monitoring this situation for years, and introduced comprehensive legislation over
a year ago to fight mortgage fraud and protect consumers against abusive lending
practices. Obama’s STOP FRAUD Act provides the first federal definition of mortgage
fraud, increases funding for federal and state law enforcement programs, creates new
criminal penalties for mortgage professionals found guilty of fraud, and requires industry
insiders to report suspicious activity. This bill also provides counseling to homeowners
and tenants to avoid foreclosures. Finally, Obama’s bill requires the Government
Accountability Office to evaluate and report to Congress on various state lending
practices so that state regulations that undermine consumer’s rights can be identified and
hopefully eliminated.
While it’s grouped under the heading of Subprime lending this initative is obviously
pointed at the entire mortgage industry, which is fine, but unless we’re considering all of
America subprime (which isn’t too far off) it’s a bit of a misnomer. Let’s take a look at
some of the ideas in this plan.

Obama’s STOP FRAUD Mortgage Fraud Act

Obama’s STOP FRAUD Act provides the first federal definition of mortgage fraud,
increases funding for federal and state law enforcement programs, creates new criminal
penalties for mortgage professionals found guilty of fraud, and requires industry insiders
to report suspicious activity.
I’m a little confused by the STOP FRAUD act because it seems to me that we all have a
pretty decent understanding of mortgage fraud and what it means. On every loan
application (known as the 1003) signed is a little statement at the end that says:
Each of the undersigned specifically represents to Lender and to Lender’s actual or
potential agents, brokers, processors, attorneys, insurers, servicers, successors and assigns
and agrees and acknowledges that: (1) the information provided in this application is true
and correct as of the date set forth opposite my signature and that any intentional or
negligent misrepresentation of this information contained in this application may result in
civil liability, including monetary damages, to any person who may suffer any loss due to
reliance upon any misrepresentation that I have made on this application, and/or in
criminal penalties including, but not limited to, fine or imprisonment or both under the
provisions of Title 18, United States Code, Sec. 1001, et seq.;
For full report,visit:
http://mortgage-super.blogspot.com/