Marcy Kaptur

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise with great privilege to wish a very happy birthday that will come on February 23 to one of our most distinguished Members who served for so many years, Congressman Louis Stokes of Cleveland, Ohio. He will turn 87 on February 23. And truly, he deserves recognition during this Black History Month, and I pay him his due honor. He grew up in difficult circumstances in public housing. His widowed mother had to raise her two sons, one of which, Louis, became the first African American congressman ever elected from the State of Ohio, and his brother, Carl, the first African American mayor of Cleveland, Ohio. Can you imagine that family? Can you imagine their struggle? I wish to place in the Record tonight some of his story. One of the tremendous accomplishments that he achieved as an attorney was trying many cases in front of the U.S. Supreme Court, including a case which created Ohio's first mostly minority congressional district, and then later in life he had the opportunity to run for that seat. He changed the face of this country. I'm just so pleased to call him our friend, and let us take the time to fully recognize the admirable and path-breaking contributions of former Congressman Louis Stokes during this year's Black History Month. He deserves it. [From Cleveland.com, Feb. 13, 2012] Lawyer Louis Stokes Became Ohio's First Black Congressman: Black History Month (By Grant Segall) As part of Black History Month, we honor Louis Stokes, Ohio's first black congressman. Stokes, who turns 87 on Feb. 23, still practices law with Squire Sanders, mostly in Washington, D.C. At the Outhwaite housing project, a young, widowed Louise Stokes used to display her hands, callused from maid's work, and tell her boys to work with their minds. A calm, genial Lou helped her raise his flamboyant kid brother, Carl, who became the first black mayor of a major U.S. city. Lou graduated from Cleveland Central High School and after serving three years in the military in World War II, earned his law degree in 1953. He became a leading lawyer. He argued three cases before the U.S. Supreme Court and persuaded it to create Ohio's first mostly minority congressional district in 1968. Local leaders persuaded him to represent it. In Washington, Stokes chaired a committee probing John F. Kennedy's assassination, dressed down Col. Oliver North over the Iran-Contra scandal and steered vast sums to health clinics, job programs and veterans care. At home, he launched a famous district caucus and Labor Day parade. After 30 years, he retired undefeated. A dozen or so landmarks have been named for him, including a building at the National Institutes of Health.

Ms. KAPTUR

Ms. KAPTUR. I think what's going to happen with this is, even though over a million homeowners are likely to be helped and several hundred thousand get some recompense, maybe an average of $2,000 per household, what's going to happen is it's going to precipitate more foreclosures as the system continues to progress. And that is a deep concern of mine because these banks have not been noted for treating customers well. According to the Justice Department, however, the agreement does not prevent any claims by individual borrowers who wish to bring their own lawsuits. And I think it's incumbent upon lawyers across this country, our Progressive Caucus, to look for legal remedies to continue to gain sweet justice for those who have been so harmed.

Ms. KAPTUR. There will be no justice. The Congressman has pointed out something that is extraordinarily important. There are those who seek to harm the American people, whether it's through financial crimes or those who are true enemies of our Republic; and we have to be strong on all fronts. In this arena of prosecution, we have been very weak.

Ms. KAPTUR. I thank my dear colleague from Minnesota, and thank you for your leadership on so many issues here. I listened with care to what you've been presenting today to give voice to the American people from coast to coast. And I want to thank you, in particular, for the work you've done on mortgage foreclosures, on holding Wall Street accountable, Congressman Ellison. No one has fought harder. Minnesota's been affected, your home city of Detroit, all across northern Ohio, Toledo to Sandusky to Lorain to Cleveland to Parma, all these communities struck so hard by Wall Street's malfeasance. And I wanted to join you today as you keep a focus on who the wrongdoers really have been, and how we help the Republic heal; to thank the Obama administration for the efforts they've made to date on a major settlement that's being announced during the same timeframe as we speak here, where individual States and five of the major Wall Street banks who are responsible, who used widespread fraudulent paperwork that precipitated the foreclosure crisis, that this settlement will actually bring some measure of justice. And we ought to claim a great deal of credit because the Progressive Caucus has been working so hard on this, and housing and the mortgage foreclosure crisis has been at the top of our agenda. The settlement, the initial settlement will reportedly impose a $26 billion penalty against Wells Fargo, Bank of America, JPMorgan Chase, Allied Financial, and Citigroup that were at the heart of the schemes that led to the securitization and collateralized debt obligation risk- taking. The total amount could grow to $30 billion or $45 billion if additional banks join the settlement. Given the extent of the damage they've caused, it's a start, and frankly, a very important one. We can't forget that millions of America's families lost their homes, and countless more are still dealing with foreclosure. And our cities have empty hulks of neighborhoods that are struggling as a result. If you come to places that I represent, as you've mentioned, in northern Ohio you can see the thousands of vacant structures that these banks left to decay. They didn't even manage them well once they possessed them. In neighborhood after neighborhood, the damage these banks inflicted is incalculable as they achieved the largest transfer of equity and wealth from Main Street to Wall Street. They've made every community more poor. This agreement is the largest joint Federal/State settlement ever obtained and the result of unprecedented coordination between the various corners of our government and the States. And it needs to be a major settlement. One in five American families with a mortgage today--this is an astounding number--owe more than the house is actually worth by an average of over $50,000. The collective negative equity across the Nation is over $700 billion. For years I've come to this floor urging Congress to do more, and one critical part of this agreement is that it does not provide blanket immunity to the banks for their misdeeds. While the ink is barely dry on this agreement, the press is reporting, and I quote, Officials will also be able to pursue any allegations of criminal wrongdoing. And I know the congressman and I want to go down that road, and I wish to place in the Record an article from The New York Times this week that talks about how African American New Yorkers making more than $68,000 are nearly five times as likely to hold high interest mortgages as Caucasians of similar income. [From the New York Times, Feb. 7, 2012] That Comeback Trail for the Economy? Here, It's Littered With Foreclosures (By Michael Powell) To walk 145th Street in South Jamaica, past red-brick homes with metal awnings and chain-link fences, is to find a storm of immense destructive power still raging. Three years ago, when I wandered this block south of Linden Boulevard in Queens, banks had foreclosed on eight homes. In the years since, banks have filed notice against a half-dozen more owners. Some of those homes sit abandoned, plywood boards nailed across doors and windows, as if to guard against further spread of this plague. We are accustomed to hearing politicians talk of a halting recovery from the recession. They detect heartbeats in the job market and flickers of life in house sales. New York and New Jersey, our governors proclaim, are on the comeback trail. Not here. A dozen miles from Midtown Manhattan, the foreclosure belt stretches across the heart of black homeownership in this city, from Canarsie and East New York in Brooklyn, to Springfield Gardens and St. Albans, Queens, where Fats Waller, Count Basie and Ella Fitzgerald once owned handsome Tudor-style homes. Black Americans came late to homeownership for reasons deeply rooted in our tragic racial history. Black New Yorkers making more than $68,000 are nearly five times as likely to hold high-interest mortgages as whites of similar income, and their default rates are much higher. Now a generation watches as its housing wealth is vaporized. Organizers with the Neighborhood Economic Development Advocacy Project pored over 2011 mortgage default data. They found that 345,000 city mortgages were in default or delinquent last year. In corners of southeast Queens, banks filed as many as 150 delinquency notes for every 1,000 housing units. Attorney General Eric T. Schneiderman says that statewide the number of New Yorkers at risk of losing homes exceeds the population of Buffalo, Syracuse and Rochester combined. In Jamaica, ``for sale'' signs sit two, three and four to a block. Real estate agents resemble fishermen who've kept lines in the water too long. Of late, matters have grown worse. The federal government has stopped paying counselors and lawyers for those at risk of foreclosure, and Gov. Andrew M. Cuomo, who takes pride in his reinvention as a fiscal conservative, has declined to foot the bill. I stop Randy Ali, a Guyanese ironworker, as he tinkers with his SUV on 145th Street. Which is his house? He nods at a two-story brick home. ``I paid $360,000.'' He gives a mournful nod. ``I just got a notice from the city that it's valued at $215,000.'' He looks embarrassed. How could he foresee a housing collapse this huge? ``You have a family, you want a place to live.'' Pause. ``Do I walk away?'' Say this much: New Yorkers are better off than those who live in the acres of foreclosed homes in the deserts around Phoenix and Las Vegas. Our politicians are not always an inspiring lot, but New York has a social democratic tradition, and they wove a safety net. Banks must submit to months of mediation before foreclosing, and lawyers must attest that the bank can prove ownership. Judges here show waning patience for the three- card monte act of some banks. Just a few weeks ago, the Appellate Division of State Supreme Court took the unusual step of ruling that Bank of America could not foreclose on an Orange County home of a New York City police officer. The judges upheld a lower court ruling that the bank's ``conduct was nothing short of appalling.'' Still, the fevers rage on. On Friday, I stepped off the elevator in State Supreme Court in Queens. Shafts of sun poured across the marble floor, as dozens of men and women sat in shadow, awaiting mediation. A computer list is taped to the wooden door frame. Every foreclosure case has been adjourned 4, 5, 10 times. More homeowners hold tight to their homes than a few years ago, but the cost is weeks of missed work and legal bills piled high. Freeman N. Hawes Sr. walks into the mediation room. He's a husky, cheerful black man, from Rosedale. The bank agent nods pleasantly. She thinks the bank might grant him a mortgage modification. But she can't get the bank on the phone just now. Perhaps next time? The mediator sets a new date. Mr. Hawes walks to a bench and, from a brown plastic bag, pulls dog-eared letters from Nationstar Mortgage. Nationstar, the letters show, agreed that he had made his payments and promised to modify his mortgage in 2010, and again in July 2011: It broke both promises. He has lived in Rosedale, a black middle-class neighborhood, for decades. He's edging toward 70 and holds two jobs with no plans of retiring. ``I'm not one to hold grudges,'' he says. ``The Lord says I can live 125 years, so I'll keep paying the bank. But why can't I get to the finale?'' That's a question that haunts thousands of homeowners. Madam Speaker, a major settlement was just reached between the individual states and 5 of the major Wall Street banks whose widespread use of fraudulent paperwork fueled the foreclosure crisis. This initial settlement will reportedly impose $26 billion in penalties against Wells Fargo, Bank of America, JP Morgan Chase, Ally Financial and Citigroup. The total amount could grow to $30 billion or $45 billion if additional banks join the settlement. Given the extent of the damage that they caused, it's a start, and an important one. We cannot forget that millions of American families lost their homes, and countless more are still dealing with foreclosure. If you come to places I represent in Northern Ohio, you can see the thousands of vacant structures that these banks left to decay throughout individual neighborhoods. The damage these banks inflicted is incalculable. This agreement is the largest joint federal-state settlement ever obtained, and it is the result of unprecedented coordination between various corners of the government. And, it needs to be. One in five American families with a mortgage owe more than the house is actually worth today, by an average of $50,000. The collective negative equity across the nation is $700 billion. For years, I have come to this floor urging Congress to do more. One critical part of this agreement is that it does not provide blanket immunity to the banks for their misdeeds. While the ink is barely dry on this agreement, the press is reporting that ``Officials will also be able to pursue any allegations of criminal wrong doing.'' And, this is very important. According to the Justice Department, ``the agreement does not prevent any claims by any individual borrowers who wish to bring their own lawsuits.'' Yes this is an important step, but we must remember the scope of the damage and the magnitude of fraud that was committed. Much work still needs to be done. During the past decade, we as a country failed to take white collar crime seriously, and we as a country are still dealing with the damage that was done to our housing market. Already back during the Bush Administration, the FBI testified before Congress that they were seeing an epidemic in white collar crime and that we did not have anywhere near enough agents to deal with it. Well, history has shown that we never provided the FBI and other investigators and prosecutors with the full resources they needed. During the much smaller Savings and Loans crisis of the 1980s, we set up a series of strike forces based in 27 cities, staffed with 1,000 FBI agents and forensic experts and dozens of Federal prosecutors. We did not do that this time around. I have a bill that I have been asking for my colleagues to support, week in and week out. It is H.R. 3050, ``The Financial Crisis Criminal Investigation Act.'' This bill would authorize an additional 1,000 FBI agents, a sufficient number of forensic experts, and additional employees by the Attorney General to prosecute violations of the law in the financial markets. Like today's announcement, we have seen some progress in getting more FBI agents, but more needs to be done. In last year's appropriation, Congress made a bipartisan decision to include funding for more than two hundred additional agents. It's good news, but we cannot be soft on this kind of crime. Families, neighborhoods, and whole communities were victims. Earlier this week, the New York Times reported on what it described as a foreclosure belt that runs through the heart of African American homeownership in New York City. I want to include this article in the record, because it details a very important element of the foreclosure crisis. According to the Times, black New Yorkers making more than $68,000 are nearly five times as likely to hold high-interest mortgages as whites of similar income, and their default rates are much higher. Now a generation watches as its housing wealth is vaporized.'' In Cleveland, we see neighborhoods struggling to survive as well. In Cuyahoga County alone, there now are an estimated 30,000 vacant structures. We see shocking pictures of homes stripped of everything from the siding to the kitchen sink, even the floor boards. We see homes that were once worth $100,000 stripped of their entire value. We see whole communities that were victimized by the actions of Wall Street. Just last month, the President announced during the State of the Union a new working group to look into mortgage fraud. It will coordinate efforts between the FBI, the Justice Department, and various states to go after those on Wall Street who have perpetuated fraud in the markets, using mortgage backed securities. Yet another good step, but we have a lot more work to do. It is well past time for Wall Street to accept responsibility for its role in the housing crisis. Big Wall Street banks and the secondary markets made obscene profits during the 1990s up to the market crash in 2008. During that period, banks targeted communities, looking for individuals to take on mortgages the banks knew they could not afford. And then Wall Street went looking to make fast money on individual American dreams and local mortgage markets. Those responsible did not care what ultimately happened to families, communities, or whole cities. And when the market collapsed, the American taxpayer actually bailed them out. Today's settlement is big news, and it's well past time that Wall Street started to pay up. But, we cannot forget that this story is far from over, and our work is not over. I think the civil rights aspect of what has gone on is extraordinarily important. I don't want to overstep my time boundaries here, Congressman Ellison. Do I have a couple of extra minutes in this period or not?

Ms. KAPTUR. What this group did was they actually have threatened the entire system of capital formation in this country because they have disrupted the measurement of value at the local parcel level. So our normal system of recording deeds and value in Minnesota, in Ohio, was thrown out the window as they went to the MERS system, the electric registration system.

Ms. KAPTUR. They went over the heads of all of our local property recording offices, our titling offices. That is at the heart of capitalism, itself. You would think there would be a roar out of other economic interests in this country, saying, Hey, you fellows, you almost brought down capitalism. You almost brought down the whole market economy. And they actually did if you see the damage still rippling through this country. Yet they're not being prosecuted? Think about that.

Ms. KAPTUR. The first in line were the originators, the very institutions we're talking about here: Citicorp; Bank of America; Goldman Sachs is now involved in that; Wells Fargo; HSBC; UBS. It's all these institutions, and they originated through their intermediaries, like Countrywide, which was involved. When the bad loan was made, they then sold it to the secondary market. So now most of the prosecution has been of the secondary market activities, which really soured in about 2007, 2008, but the real perpetrators started well over a decade earlier. That's where we need to go----

Ms. KAPTUR. I am so happy the gentleman has asked that question. I have served on the Housing committees for my entire career in Congress. There has been no modern recovery in our country that has not been led by housing development. If you talk to Realtors, if you talk to homebuilders, you'll see how poor that market is right now. We have to fix the housing sector. On the part of the majority here, there haven't been any serious hearings on this. Have we gone out to the country? We used to go out to the country. When there is a crisis, you go out to the country. If Louisiana loses part of its southern edge, we go down there. We try to help. We try to figure out what's going on. On this housing problem, there has been such timid action, almost no action, by this Congress. We've just let it fester and hemorrhage across the country. History will show this was one of the most irresponsible periods that damaged our housing stock from coast to coast, and we will be paying for it for years to come--in shattered lives, in shattered communities. If I chaired the committee, we'd be all over the country. We wouldn't be sitting here in Washington doing nothing. We would be going out to these communities.

Ms. KAPTUR. And the school districts, Congressman Ellison. When you look at the revenues that are bleeding away from school districts, the harm these big banks did--and they used to be speculation houses--and then they changed their name to banks. They got to be holding banks then. But if you look at the harm that they caused across America, it's still not over; and they're not being held accountable. Actually, they got richer. As a result of this crisis, six banks now control two- thirds of the finances of this country. Before the crisis, they controlled about 40 percent. So they just got bigger and more powerful while community after community has been struck with more homelessness, with declining revenues to school systems, declining revenues into coffers so they can't hire police. The drug trade has just locked down in some of these communities as people struggle to earn their way forward in the most unfortunate way. You look at the harm this has caused around the country, it's profound. I gave a Special Order the other day, and I said I think what we ought to do with these big bankers, places like Goldman Sachs and Citigroup, they ought to come to our homeless shelters and scrub the floors. Once we get them prosecuted, and I wait for that day, wouldn't it be great if the CEO of Goldman Sachs had to come to a homeless shelter in Minneapolis and scrub the floors and join Habitat for Humanity for a couple of years and go try to fix up some of these houses in these communities? They haven't confronted their damage. They feel they're being held harmless, and you know what, they are.

Ms. KAPTUR. When that bill was passed, I would venture to say 99 percent of the Members of Congress didn't even know it was in there because it was buried in an omnibus appropriations bill. Nobody even knew it was in there. So that was sort of the final straw that broke the camel's back. I wanted to say to the gentleman that I'm sure in Minnesota--and you can verify this for me--just like in Ohio, business after business tells me, Marcy, we can't get a loan.

Ms. KAPTUR. I would say to the gentleman that I think what it has brought us to is of only being for the 1 percent because, if you look at what is going on, they have the big banks confiscating private property. In other words, where people had equity, they took it away; right? People walked away from their homes. They didn't get legal advice. They had a leg to stand on, but they were so afraid that ordinary families just walked away from their homes, and many of them could still be in their homes. So they're confiscating private property. Then, at the Federal level, they want to take and cash out public property that belongs to the American people: in our parks-- right?--and in our lands. Think about what they're talking about. So a few want it all. And we're saying, that's not what America's about. America is about everyone--we, the people, all of us. Not just the few, but about the 99 percent, not just the 1 percent. But when six banks control two-thirds of the wealth of this country, that's something to be worried about because it's too much power in too few hands.

Ms. KAPTUR. The normal banking system isn't working, and what they're trying to do at the Federal level is to focus attention just on the secondary market activity rather than on the loan originators. So they're saying, Oh, the problem was at Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac were the second in line.

Ms. KAPTUR. I'll tell you, Congressman, one thing we need to do is look at some of the people that sit over at the Justice Department and where they used to work before they got there, because I think one of the reasons that prosecution isn't occurring at the level that it should is there is some paralysis in some places because of those who are able to block a play. They're able to block prosecution. We have a bill, H.R. 3050, the Financial Crisis Criminal Investigation Act, that would authorize an additional 1,000 FBI agents. That's just as many as we had during the S&L crisis, which is much smaller than what we have today. But across our cities, across our regions, we don't have the agents in place to go after the crimes we've been talking about.

Ms. KAPTUR. They made the highest salaries in the country, bonuses. We didn't take a penny away. I had a bill to take 100 percent of the bonuses away. Guess what? They never bring it on the floor. We couldn't even take the bonuses away, much less their yachts, their seven houses, all the fancy cars. They're living a great life, and they believe they are immune from prosecution.

Ms. KAPTUR. It reminds me of baseball. You've got some players who are out on the field. They're saying, Well, you've got to hold the shortstop accountable for a little bit of what he did when he's out there on the field. But you've got the team coach sitting in the dugout. Right? They haven't touched the coach. They haven't even touched all the players yet, and they sure haven't seen the one who's calling all the plays. So what they're dealing with here are some of the mortgages in the secondary market; they haven't touched the coaches. They haven't touched the originators on the mortgages in this particular settlement. Now, in terms of you said how much does it help, the hole to our economy is several trillion dollars, counting unemployment and lost revenues and so forth. Overall, the TARP was $700 billion. I didn't support it. This settlement is maybe $25 billion. Ohio alone had a gap about that large. So when you look at the settlement, it's important, it's a victory. But we've got to take the next step. We've got to get the first baseman, the third baseman, the catcher, the batter, and then we've got to go after the coaches in the dugout.

Ms. KAPTUR. It's not a pretty picture.

Ms. KAPTUR. If the gentleman would yield, the robo-signing.

Ms. KAPTUR. Which is to the originators who created the schemes that allowed, as you say, the lid to be blown off the regulation of derivatives and of these fancy schemes. Right now, yes, we're trying to get ahold of the secondary market activity, but they only received the ball from the original passer--I call them the ``coach''--the ones who were actually developing the game plan, and you have to go back a decade. That's why we need robust prosecution at the FBI.

Ms. KAPTUR. All I know is that it's big news and that we're receiving it well. It's an important first step. I think it's like somebody just hit a solid first base hit, and we've got some other bases to go around until we get to home plate. I really want to thank the gentleman very much for allowing me time today as we try to repair the Republic. This is a very helpful step. I want to thank the Obama administration and wish them on to do even better. Let's get those agents hired. I hope the President's budget, when it comes up here, will allow us to hire 1,000 agents at the FBI in order to get this job done, not just in the secondary market, but to go after the originators.

Ms. KAPTUR. Well, you know what's important to point out. You asked a critical question because this settlement does not deal with those that originated mortgages. It only deals with those mortgages that were held in the secondary market. And so it doesn't claw black to the perpetrators of the scheme, and that's why I'm saying this is an important first step. We also need, in every city, as we had during the savings and loan crisis, strike forces of FBI agents. There were maybe 55 agents working on this. We tried to boost that number to 200. During the S&L crisis we had 1,000. We need accounting and forensic experts to piece together what happened in community after community. Congressman, in my area there were liars loans that were targeted to senior citizens and the disabled.

Ms. KAPTUR. Please.

Ms. KAPTUR. Please.

Ms. KAPTUR. What they have done are capital crimes. They have harmed our Republic so much with this massive transfer of wealth. I think the best thing the American people can do is if they are paying a mortgage loan or a car loan or a student loan to any one of these big institutions that harmed America, take it out, renegotiate that loan with a local institution, credit union, community bank that didn't do this harm to the Republic. That's something every American family can do. Then when you think about it, what this group of bankers did--and I call them speculators because they really weren't prudent bankers.

Ms. KAPTUR. Liars loans. They would go up to a senior citizen, a woman after she'd lost her husband and they would say, ma'am, you know, we feel very sorry for you, but we want you to know we have a deal. You'll never have to worry about your financial future again. And they got her to cash out her equity, and they put one of these balloon payments on there, so she ended up having to pay more than she could afford 10 years out. This is what happened to people. There's so much crime inside of what was done in community after community. And what's been happening at the FBI is they have not been able to beef up their Financial Fraud Division, and they've been held--that's why you haven't had the people arrested.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, it's over time for Wall Street megabanks, their CEOs, speculators, and sharpies to come and scrub the floors of homeless shelters across this country that are crammed with people who have lost their homes. Let's make those Wall Street bankers sign up to work with Habitat for Humanity to restore housing in neighborhoods across our Nation. Wouldn't that be sweet justice? Once they've paid back the billions that they owe the American people, whose homes they've raided of equity, let's put them to work. Wouldn't it be great to see the CEO of Goldman Sachs, I think his name is Lloyd Blankfein, out there with buckets and scrub brushes? Come to Toledo; come to Cleveland; come to America, the part you've hurt so deeply. Wouldn't it be great? Let him be joined by Josh Bolten, who was there when the Bush administration handed the toxic mortgage paper to the people of the United States. Well, come on down, Angelo Mozilo, from Countrywide. I think a little hard work would help you a whole lot. How about Bank of America? How about the CEO there? How about JPMorgan Chase? How about Jamie Dimon? I wonder when was the last time he scrubbed a floor. How about Jim Johnson, who headed up Fannie Mae, or Hank Paulson? Oh, I'd love to see this. As I speak, coming to light are important developments in the much anticipated settlement between the individual State governments and the big Wall Street banks over the widespread use of fraudulent schemes and missing paperwork that fueled the foreclosure crisis. As the press has reported, we are seeing the possible imposition of $25 billion in penalties against Wells Fargo, Bank of America, JPMorgan Chase, Ally Financial and Citigroup. Given the extent of the damage they caused, it's a small start. Just in Ohio, the financing gap was $20 billion. That's what it would take to stabilize the housing market in just our State. Most importantly, The New York Times is reporting that the deals will ``preserve the right to investigate past misdeeds by the bank.'' Not one, not even the titans of Wall Street, should be able to buy legal immunity for their criminal acts as millions of families lose their homes. It is important that we do not forget how systemic mortgage fraud has become. In an interview given by a former executive vice president of Countrywide Financial, a giant player in the U.S. mortgage business, this executive who was in charge of fraud investigations at the company related how ``Countrywide loan officers were forging and manipulating borrowers' income and asset statements to help them get loans they weren't qualified for and couldn't afford.'' She went on to say that, whenever we looked through all of the recycle bins, they were full of signatures that they had cut off of one document and put on another and then photocopied or faxed. According to her, the fraud was systemic, taking place in Boston, Chicago, Miami, Detroit, Las Vegas, Phoenix and, I can tell you, Cleveland, Parma, Lorain, Elyria, Toledo, and Sandusky. What we cannot forget is that these stories are not isolated. The FBI testified before Congress as early as 2004 that they were seeing an epidemic in white collar financial crimes, and they did not have anywhere near enough agents to go after the wrongdoers. Wasn't that convenient? While the number of agents has increased due to congressional pressure, the FBI needs to have more special agents and forensic experts to properly investigate the level of accounting corruption that is believed to exist. This is the most basic, bipartisan concept I can think of, that criminals cannot be allowed to get away with their crimes because our law enforcement agencies lack the manpower to stop them. I have a bill I hope my colleagues can support. It is H.R. 3050, the Financial Crisis Criminal Investigation Act, that would authorize an additional 1,000 FBI agents to take on the kinds of fraud that have destroyed the economic futures of countless American families and so gravely harmed our Republic. A good first step was the inclusion of more than 200 additional agents in the last appropriations cycle. This administration should use it to go after these Wall Street perpetrators. The President announced during his State of the Union address a new working group to look into mortgage fraud. It will coordinate efforts between the FBI, the Justice Department, and various States to go after those on Wall Street who have perpetuated fraud in the markets, using mortgage-backed securities, collateralized debt obligations, and lots of other sophisticated financial tricks. Given the seriousness of the fraud, the number of American families that have lost their homes and savings, and the drag that that foreclosure crisis continues to have on the economy means we need more vigilance and let's confront Wall Street, and put the perpetrators in jail. And let's have them scrub floors in this new year. [From the New York Times, Feb. 5, 2012] Deal Is Closer for a U.S. Plan on Mortgage Relief (By Shaila DeWan and Nelson D. Schwartz) With a deadline looming on Monday for state officials to sign onto a landmark multibillion-dollar settlement to address foreclosure abuses, the Obama administration is close to winning support from a crucial state that would significantly expand the breadth of the deal. The biggest remaining holdout, California, has returned to the negotiating table after a four-month absence, a change of heart that could increase the pot for mortgage relief nationwide to $25 billion from $19 billion. Another important potential backer, Attorney General Eric T. Schneiderman of New York, has also signaled that he sees progress on provisions that prevented him from supporting it in the past. The potential support from California and New York comes in exchange for tightening provisions of the settlement to preserve the right to investigate past misdeeds by banks, and stepping up oversight to ensure that the financial institutions live up to the deal and distribute the money to the hardest-hit homeowners. The settlement would require banks to provide billions of dollars in aid to homeowners who have lost their homes to foreclosure or who are still at risk, after years of failed attempts by the White House and other government officials to alter the behavior of the biggest banks. The banks--led by the five biggest mortgage servicers, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial--want to settle an investigation into abuses set off in 2010 by evidence that they foreclosed on borrowers with only a cursory examination of the relevant documents, a practice known as robo-signing. Four million families have lost their homes to foreclosure since the beginning of 2007. As recently as two weeks ago, with federal officials hoping to complete a deal that President Obama could cite in his State of the Union address, California's attorney general, Kamala Harris, made it clear she was not on board, terming the plan inadequate. But in the last few days, differences have narrowed in negotiations that one participant described as round the clock, with California officials in direct communication with bank representatives for the first time in months. ``For the past 13 months we have been working for a resolution that brings real relief to the hardest-hit homeowners, is transparent about who benefits, and will ensure accountability,'' Ms. Harris said in a statement. ``We are closer now than we've been before but we're not there yet.'' The settlement has been hamstrung by one delay after another over the last year. Winning California's support now would represent a major win for the White House in this election year. ``I am encouraged by the conversations we've had with many states in the last few days,'' said Shaun Donovan, the secretary of housing and urban development. ``This will be one of the most significant steps in the recovery of homeowners, neighborhoods and the broader housing market from the worst collapse since the Depression.'' ``My fundamental point is that it's a first step,'' he added, citing measures like Mr. Obama's proposal last week to lower interest rates for homeowners who are still current on their mortgages. Officials involved in the negotiations cautioned that broader state support could still be days away. And although the timing of any announcement is subject to last-minute maneuvering, as it stands now the deal would set aside up to $17 billion specifically to pay for principal reductions and other relief for up to one minion borrowers who are behind on their payments but owe more than their houses are currently worth. The deal would also provide checks for about $2,000 to roughly 750,000 who lost homes to foreclosure. Those figures are contingent upon the number who respond to the offer, which is likely to go to people who lost their homes between Jan. 1, 2008, and Dec. 31, 2011. In addition, said Patrick Madigan, the Iowa assistant attorney general, homeowners who participate in the settlement will still have the right to sue the banks for improper behavior in the foreclosure process. California has been focused on measures that would benefit individual homeowners, while New York has been most interested in preserving its ability to investigate the root causes of the financial collapse. Another critical issue for California is narrowing the amnesty given to banks because under the state's False Claims Act, state officials and huge pension funds like Calpers would be able to collect sizable monetary damages from the banks if they could prove mortgages were improperly packaged into securities that later soured. What is more, California's participation would result in having more money available for many other states, including an estimated $500 million in additional money for Florida. But the agreement's terms do not guarantee minimum allocations of mortgage relief by state. Mr. Donovan added that there had been numerous discussions with individual states that had specific concerns. California officials and other veterans of the foreclosure crisis are haunted by the failure of past attempts to alter the behavior of the big banks, including a 2008 deal with Countrywide Financial, the subprime giant now owned by Bank of America, and a more recent agreement last April between federal regulators and the biggest mortgage servicers. The backers of the latest deal insist their plan has more teeth, with a powerful outside monitor to oversee enforcement and heavy monetary penalties if banks fail to live up to commitments. While the past agreement with Countrywide gave banks credit even if their offers to modify the interest rate of the mortgage or write down principal were not accepted by borrowers, this deal counts only what banks actually do for homeowners. If banks fall short of the multibillion-dollar benchmarks set out for principal reduction and other benefits for homeowners, they will have to pay the difference plus a penalty of up to 40 percent directly to the federal government, according to Mr. Madigan. The depressed housing market continues to pose a drag on the halting economic recovery. RealtyTrac, which analyzes housing data, predicts two million more foreclosures over the next two years. Some 11 million families owe more on their houses than they are worth. The settlement, if all states participate, will also include $3 billion to lower the rates of mortgage holders who are current. Banks will get more credit for reducing principal owed and helping families keep their homes, and less for short sales or taking losses on loans that were likely to go bad, like those that were severely delinquent.