IV 

112TH CONGRESS 

1ST SESSION H. CON. RES. 85 

Expressing the sense of the House of Representatives regarding the proposed 

settlement between the Department of Justice, the State attorneys general, and mortgage servicers regarding mortgage fraud and the economic 

crisis. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 3, 2011 

Ms. BALDWIN (for herself, Mr. HIGGINS, Mr. TOWNS, Mr. TIERNEY, Mr. HINCHEY, Ms. LEE of California, Ms. SCHAKOWSKY, Mr. CICILLINE, Ms. 

KAPTUR, Mr. GRIJALVA, Mr. JACKSON of Illinois, Ms. WOOLSEY, Mr. 

MCDERMOTT, Mr. STARK, Mr. THOMPSON of California, Ms. MATSUI, 

Mr. HASTINGS of Florida, Mr. HOLT, Ms. MOORE, Mr. MCGOVERN, Ms. 

TSONGAS, Mr. ELLISON, Mr. COHEN, Mr. LARSON of Connecticut, Mr. 

CUMMINGS, Mr. KUCINICH, Mr. GUTIERREZ, and Mr. CONYERS) submitted the following concurrent resolution; which was referred to the 

Committee on the Judiciary 

CONCURRENT RESOLUTION 

Expressing the sense of the House of Representatives regarding the proposed settlement between the Department of 

Justice, the State attorneys general, and mortgage 

servicers regarding mortgage fraud and the economic 

crisis. 

Whereas the United States has experienced a mortgage crisis 

since 2004; 

Whereas the mortgage crisis resulted from a number of 

causes in the housing and credit markets, including an 


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increase in non-traditional mortgages such as risky 

subprime loans, substandard underwriting practices by 

lenders, and unstable risk-management practices; 

Whereas, since 2006, more than 3,000,000 houses in the 

United States have been recaptured through foreclosure; 

Whereas the rate of foreclosures has increased an additional 

23 percent since 2008, with approximately 2,900,000 

home mortgages in the United States in foreclosure in 

2010; 

Whereas homeowners across the Nation have been hit hard 

by the mortgage crisis with one in four homeowners ‘‘underwater’’ on their mortgages, meaning that their home 

is worth less than the outstanding balance due on the 

mortgage on the property; 

Whereas underwater homeowners nationwide owe, in aggregate, approximately $750 billion more than their homes 

are currently worth; 

Whereas the ongoing housing crisis and significant increase 

in mortgage delinquencies and foreclosures has contributed to the current financial crisis; 

Whereas the Federal Bureau of Investigation (FBI) has stated that ‘‘mortgage fraud is a growing crime threat that 

is hurting homeowners, businesses, and the national 

economy’’; 

Whereas the FBI has increased its investigative resources to 

address the mortgage fraud crisis; 

Whereas the FBI experienced an increase in suspicious activity reports filed by federally insured financial institutions 

from 6,936 reports in 2003 to 67,190 in 2009; 


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Whereas investigations by the FBI and other law enforcement entities, including State attorneys general, have focused on fraud related to loan origination, mortgage loan 

securitization, and mortgage servicing; 

Whereas, in the fall of 2010, reports nationwide exposed 

fraudulent foreclosure filings, including the practice of 

signing mortgage documents without verifying the content of the document, often referred to as ‘‘robo-signing’’; 

Whereas the attorneys general of the 50 States initiated an 

official investigation into the robo-signing scandal in October 2010; 

Whereas the State attorneys general and the Federal Government have pursued a settlement with mortgage servicers, 

including Bank of America, JPMorgan Chase, Ally Financial, and Wells Fargo, that exceeds the original goal 

of addressing the robo-signing scandal; 

Whereas financial institutions have faced lawsuits regarding 

their role in the subprime mortgage boom and accompanying financial crisis; 

Whereas Bank of America has reached an agreement to pay 

$8.5 billion to settle claims over purchases of mortgagebacked securities by Countrywide Financial, which is 

owned by Bank of America; 

Whereas the $8.5 billion settlement with Bank of America 

represents only 2 percent of the $424 billion in mortgages that Countrywide issued and only 4 percent of the 

outstanding principal on the loans; 

Whereas the Federal Housing Finance Agency has sued a 

group of banks, including Bank of America, Citigroup, 

JPMorgan Chase, and Barclays, for $200 billion for 

losses resulting from mortgage-backed securities; 


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Whereas the Federal Housing Finance Agency lawsuit pertains to loans sold to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan 

Mortgage Corporation (Freddie Mac) that were based on 

incorrect or missing information; 

Whereas Fannie Mae and Freddie Mac neared insolvency in 

2008 due to subprime mortgage losses, were rescued by 

United States taxpayers, and have operated under Federal conservatorship since 2008; 

Whereas State pension funds were cheated out of critical investments due to fraudulent sales of mortgage-backed securities; 

Whereas the fraudulent sales of mortgage-backed securities 

has resulted in financial losses for State’s worker retirement funds, whose investors and beneficiaries include 

teachers, firefighters, and police; 

Whereas securities fraud lawsuits have been filed on behalf 

of beneficiaries of State pension funds, including a class 

action lawsuit against Merrill Lynch, now owned by Bank 

of America, for providing misleading documents for $16.5 

billion in certificates; 

Whereas banks are required to register and pay fees with 

county offices in each State for each sale or resale of a 

mortgage; 

Whereas many banks utilized the Mortgage Electronic Registration Systems (MERS) electronic mortgage registry, 

which permitted these financial institutions to repeatedly 

avoid paying local taxes; 

Whereas local communities lost local tax revenue through the 

banks’ fraudulent behavior and local counties are now 

suing to reclaim the significant amount of lost revenue; 


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Whereas the proposed settlement between the State attorneys 

general, the Federal Government, and mortgage servicers 

is reported to be for $20 billion; 

Whereas the financial repercussions for the victims of the 

mortgage servicers’ fraudulent behavior, including homeowners, State pension beneficiaries, and local communities, far exceeds $20 billion; 

Whereas reports of the proposed settlement describe that the 

settlement may halt State investigations and prosecutions 

into the mortgage servicers’ fraudulent behavior; 

Whereas the prevention of future fraudulent behavior would 

be aided by examining the findings of investigations into 

past such behavior; 

Whereas California Attorney General Kamala Harris has 

withdrawn from the proposed settlement due to concerns 

that the proposed settlement amount was insufficient; 

and 

Whereas New York Attorney General Eric Schneiderman has 

resisted requests to halt New York State investigations 

into mortgage fraud as a condition of joining the settlement: Now, therefore be it 

1 Resolved by the House of Representatives (the Senate 

2 concurring), That it is the sense of the House of Rep3 resentatives that any action taken by the Department of 

4 Justice should be consistent with the following goals: 

5 (1) The mortgage servicers who engaged in 

6 fraudulent behavior should not be granted criminal 

7 or civil immunity for potential wrongdoing related to 

8 illegal mortgage and foreclosure practices. 


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1 (2) The Federal Government and State attor2 neys general should proceed with full investigations 

3 into claims of fraudulent behavior by mortgage 

4 servicers. 

5 (3) Any financial settlement reached with mort6 gage servicers should appropriately compensate for, 

7 and accurately reflect, the extent of harm to all vic8 tims, including homeowners and State pension bene9 ficiaries, caused by the mortgage servicers’ fraudu10 lent behavior. 

Æ 


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