Crackdown! The news and blogosphere are full of Operation Malicious Mortgage; the sting that the FBI set up to catch people engaging in mortgage fraud. So far, over 400 people have been arrested since March of this year.

You've got to wonder at what point the U.S. government decided that all these foreclosures were a bad thing. Maybe it was when they realized that skyrocketing foreclosures equals plunging property tax revenue.

On May 8, 2008, Congress passed The American Housing Rescue and Foreclosure Prevention Act, a pack of measures designed to keep people in (owned) homes, encourage more people to buy houses, and make those houses affordable. Ideally, this will revitalized foreclosed communities and encourage neighborhood property values to go up.

With such amendments to the AHRFPA as the FHA Housing Stabilization and Home ownership Retention Act, the HUD is hoping to bring the housing market back from its K. O. and get it back in the ring.

Lenders are going to have to take more care concerning their investments in home buying loans, as this act is going to have its beady little eyes on their every sub prime lending move. There are other protections, but the lender responsibility aspect is one of the most significant.

The controversy is brewing over whether this is a good move to help struggling homeowners avoid foreclosure or a taxpayer-funded get-out-of-jail-free card given to those who were too greedy, too hasty and don't want to take responsibility for their choices. The government clearly doesn't want to lose the tax dollars that these foreclosed properties would generate, but many tax payers don't want to lose their tax dollars to people who, they think, have made stupid choices and don't want to face them.

It's good that the government is officially taking notice of predatory lending and unethical real estate professionals. However, the public jury is still out as to whether this is going to actually stem the flow of unscrupulous people taking advantage of the ignorant or encourage people to acquire more home than they can afford, then throwing themselves on the mercy of the government.

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