Congress is pumping out reform legislation, with support from both sides of the aisle, that's aimed at correcting some of the problems that contributed to the financial crisis.
Last week alone President Obama signed two major bills into law. The first is intended to combat widespread mortgage fraud.
It authorizes nearly half a billion dollars for the federal government to hire new prosecutors targeting mortgage fraud, and to beef up Secret Service, U.S. Postal Service and HUD fraud investigation capabilities.
The Fraud Enforcement and Recovery Act extends the federal government's legal reach to pursue companies and individuals who currently avoid federal oversight and pursuit.
Under the legislation, people committing mortgage fraud would now be subject to federal investigation and prosecution, federal civil penalties and federal prison time -- all of which are generally tougher than their state counterparts.
Since the FBI estimates that fraud schemes bilk home owners, lenders, builders and realty agents out of billions of dollars a year, the new law should send a message: Virtually all mortgage fraud is now in the federal arena. Don't do it!
The second major bipartisan bill signed by President Obama last week was the Helping Families Save Their Homes Act, which makes the federal Hope for Homeowners foreclosure-financing and loan modification program easier for lenders and financially stressed borrowers to use.
The law also provides new protections for renters living in houses whose landlords are foreclosed upon. They will no longer be subject to immediate eviction following foreclosure, which is the case in many jurisdictions today, but instead will have rights to remain as tenants in the property for additional periods of time.
The law also significantly expands federal assistance to homeless relief and service programs around the country, giving local organizations and governments greater flexibility in the use of federal housing funds.
Finally last week, Obama administration officials confirmed that they are working on a plan -- due out within weeks - that will create a new, unitary federal mortgage market regulators with the power to oversee all players -- from small loan brokers to big banks -- unlike the current, fractured system where multiple agencies have partial oversight.
Critics lay part of the blame for the severity of the mortgage crisis on the fact that no single agency had the power to take action to deal with the widespread lax underwriting, risky subprime loan products and abusive lending schemes that characterized the years 2002 through 2006.
K. Harney
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