Home > Avid Law Center, Foreclosure > Mortgage Fraud Task Force: Will It Work This Time?

Mortgage Fraud Task Force: Will It Work This Time?

The President announced during his State of the Union Address last week, the creation of a new federal and state task force to investigate mortgage fraud that contributed to the 2008 financial crisis.

Attorney General Eric Holder said the new unit would consist of 55 Justice Department lawyers and analysts and 10 FBI agents to work with state attorney general’s offices to investigate how mortgage backed securities were created, sold  and valued by financial institutions.

Upon the creation of the unit, the panel immediately subpoenaed 11 financial institutions which were not identified.

The new unit however, has been met with some skepticism coming so late in his term and amid signs that his administration is close to settling with large banks accused of shoddy mortgage-lending practices. Critics say this appears to duplicate a lot of groundwork already done.

From ABC News:

“Wall Street leaders have also been critical of the new unit.  Jamie Dimon, the CEO of JP Morgan, said the new unit may “derail” a $25 billion settlement with JP Morgan, Ally Financial, Bank of America, Wells Fargo and Citibank for problems the banks had with their mortgage servicing and how they handled many foreclosures. The Justice Department, HUD and state attorney generals are negotiating the settlement with the banks to provide relief to people to renegotiate their mortgages.”

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