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Barak Obamma and Mortgage Fraud Prevention
Back on February 15, 2006, I posted a blog entry titled “Stop Fraud Act: U.S. Senate Tackles Real Estate Fraud,” detailing U.S. Senator Barack Obama’s 2006 proposal to fight real estate and mortgage fraud.
Thanks to a tip from Diana Golobay of HousingWire.com, I ran across the following from Obama’s campaign Web site:
Barack Obama and Joe Biden’s Plan
Protect Homeownership and Crack Down on Mortgage Fraud
Obama and Biden will crack down on fraudulent brokers and lenders. They will also make sure homebuyers have honest and complete information about their mortgage options, and they will give a tax credit to all middle-class homeowners.
Create a Universal Mortgage Credit: Obama and Biden will create a 10 percent universal mortgage credit to provide homeowners who do not itemize tax relief. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.
Ensure More Accountability in the Subprime Mortgage Industry: Obama has been closely monitoring the subprime mortgage 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.
Mandate Accurate Loan Disclosure: Obama and Biden will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.
Close Bankruptcy Loophole for Mortgage Companies: Obama and Biden will work to eliminate the provision that prevents bankruptcy courts from modifying an individual’s mortgage payments. They believe that the subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law.
Does knowing that Senator Obama wrote and introduced real estate and mortgage fraud prevention legislation sway or impact your opinion of him in terms of who you might cast your vote for this November?
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There are two issues with what you quoted from Ms. Golobay. First, her information came directly from the Obama campaign website. Second, most of the people who had committed the fraud during the boom have now left the industry. Will Sen. Obama’s plan prevent future fraud in the mortgage industry? Probably not. The fraudsters will find loopholes to exploit. Third, there is no concise definition of what constitutes fraud. Just because someone is upside-down on their mortgage doesn’t mean they were a victim of mortgage fraud or predatory lending.
The tools to fight fraud are aready in the hands of the consumer and in the documents they sign. Especially in Michigan. Michigan has a specific disclosure that lists what the rights of a homeowner are and what they can do if they feel they are a victim of fraud.
Comment by Steve Dibert — October 12, 2008 @ 12:31 pm
I agree with you, Steve. The horse has long since left the barn, why close the door now? Sounds good for campaign purposes though.
The problem is that each state and even specific cities already have their own set of disclosures. Some need to be specific to certain geographic and economic regions, but honestly, make all of the disclosures uniform and under federal guidelines. Not that the feds are any smarter but at least the laws would be more uniform and easier to enforce.
The other problem with disclosures is that many people don’t want to be bothered to read them. I’d bet any LO out there will tell you that they may give the disclosures to the borrowers but know that they really aren’t read. I’m sure there are other LO’s who make it a point to go through each document with their customers and explain what each means and they should be commended. But borrowers will still make choices that are not in their best interests, no matter how well informed they are. You cannot legislate common sense or the lack thereof.
Comment by former underwriter — October 12, 2008 @ 7:10 pm
Obama is a crook and should be investigated and indicted for his criminal activity and his part in the economic mess America is in. As he himself put it, “Just words, just speeches.” How can anyone take him seriously. He helped create the mess, now he claims to have the plan to prevent future abuses. Give me a break! What he has done is criminal. Oh, did I forget to mention his recent charitable gift to ACORN? He is still running the scam!
Comment by Rick — October 13, 2008 @ 8:53 pm
John McCain’s chief campaign strategist, Schmidt, was on the payroll, as a lobbyist, for Fannie Mae up until August 2008.
His job was to lobby favorably for Fannie Mae, an investor backed mortgage company.
At the same time as he is advising the McCain campaign, Schmidt is accepting approximately $10K+ per month from Fannie. And then McCain lied about it…..
As far as ACORN goes, it is a voter registration campaign organization that hires low cost hourly workers to find unregistered voters and sign them up. Despite the fact that some of the workers did, have always and will continue to add bogus names to the lists in order to obtain more compensation (they are paid on the number of names they list) the organization is doing the right thing by going into poor and underserved areas and signing up voters who might not have transportation or the knowledge of how to register.
The duplicate/bogus names obviously CAN NOT VOTE…..so the only one hurt or damaged by the duplicate names is ACORN. So they pay for names of people who do not exist and then the worker is fired.
Let’s focus on the real problem….rogue brokers, greedy Wall Street investment banks that bought and sold home mortgages like they were pork bellies, etc.
And by the way, Obama is probably one of the most intelligent, calm and honestly down to earth politicians we’ve known to run for President.
Thank God he is winning…..finally honesty and intelligence will be in charge of the White House once again.
Comment by Fran — October 26, 2008 @ 11:02 pm