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Paul Kiesel
Paul Kiesel
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On Mortgage Fraud: McCain vs. Obama

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Senators Barack Obama and John McCain want to go after predatory lenders. Senator Obama, contrary to Alaskan Governor Sarah Palin’s claims about his Senate record in her acceptance speech at the Republican National Convention (RNC) last night, introduced the STOP FRAUD Act in the Senate with Senator Dick Durbin, and now it is a major part of the Illinois senator’s platform. Senator McCain called for creating a task force to investigate criminal wrongdoing in the mortgage lending and securitization industry, which, incidentally, had already been created by the FBI long before McCain urged its formation. (The task force was created in 2005, and McCain didn’t call for one until this year, just a few months ago; however, certain states ramped up the effort in the last half of 2007 and the first half of 2008, like California, which created an FBI task force named SCAM in May 2008.)

Below are the two candidates’ stances on “Mortgage Fraud.” To see the candidates’ other economic policies, click here: CNNMoney.com.

McCain

· Create a Justice Department task force that punishes individuals or firms that defrauded innocent homeowners or forged loan application documents.

· Task force would also assist state attorneys general investigating abusive lending practices.

· Improve transparency in the lending process so that borrowers know exactly what they are agreeing to.

“Lenders who initiate loans should be held accountable for the quality and performance of those loans and strict standards should be required in the lending process.” — McCain

Obama

· Boost funding for law enforcement programs aimed at housing fraud by $40 million.

· Establish new federal criminal penalties for mortgage professionals found guilty of fraud.

· Require lending professionals to report suspicious or fraudulent activity.

· Establish a database of censured or debarred mortgage professionals, so borrowers can easily check the credentials of lenders.

· Establish a standardized estimate of the total annualized cost of a mortgage loan to make it easier for borrowers to compare different loans.

“We must establish stiff penalties to deter fraud and protect consumers against abusive lending practices.”– Obama