Congress is just now and six years too late taking up arms again mortgage fraud. Congress recently passed the Fraud Enforcement and Recovery Act of 2009, throwing big bucks at a Financial Crisis Inquiry Commission. This commission has the power to go after those who would perpetrate mortgage fraud on all levels – from the application to the foreclosure scammers – and investigate the causes of the current real estate debacle.

first tuesday take: This is quintessential government ineptitude and not helpful for real estate owners, current or future. Rather than directly addressing the elephant in the room – the millions of mortgages in danger of or currently in foreclosure – it goes chasing after flies, possibly only gnats. Is it important to prevent mortgage fraud? Absolutely. But the little burgeoning good that may be done by this belated analysis of unregulated lending by this new committee will continue to be overshadowed by the looming foreclosure disaster now unfolding if the Congress (and the lenders which support it) remains stubbornly opposed to mandating mortgage cramdowns. Only cramdowns will put an end to falling prices.

Re: “Congress funds mortgage fraud crackdown” by the Los Angeles Times