WASHINGTON — The Senate voted Tuesday to hire hundreds more FBI agents and prosecutors to investigate the estimated 5,000 allegations of mortgage fraud reported each month.
The 92-4 bipartisan vote came as a House panel considered an anti-predatory lending bill that attempts to ban the type of subprime mortgage loans that contributed to the nation's economic slide. It also came as the former head of a one-time leading mortgage lender, American Home Mortgage Investment Corp., agreed to pay nearly $2.5 million to settle allegations of accounting fraud.
The Senate bill, sponsored by Sens. Patrick Leahy, D-Vt., and Chuck Grassley, R-Iowa, is estimated to cost more than $265 million a year for the next two years. Supporters, including President Obama, say the legislation would more than pay for itself because of the fines and penalties that would result from more aggressive government investigations.
The measure covers the 2010 and 2011 budget years, which begin Oct. 1.In the House, North Carolina Democratic Reps. Melvin Watt and Brad Miller on Tuesday pushed their proposal to try to prohibit banks from lending to consumers considered at risk for default. Lenders would have to make a "reasonable and good faith determination" of whether the customer can pay back the money.
The bill, which the full House could vote on as early as next week, encourages lenders to refocus their business on the kind of traditional 30-year, fixed-rate loans that require consumers to pay 20 percent of their house upfront.The House Financial Services Committee was likely to approve the measure today.
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