Fraud Task Force Starts Criminal Investigation of Mortgage Servicers
WASHINGTON (LoanSafe.org) – With some of the nation’s biggest mortgage servicing entities facing allegations that they blatantly ignored procedures while processing thousands of unsubstantiated foreclosure documents, criminal indictments could be just around the corner. Per the Washington Post, people, “familiar with the matter,” report pending investigations of potential criminal violations by President Obama’s Financial Fraud Enforcement Task Force. At least five mortgage servicers are said to be under serious scrutiny.
Comprised of more than 20 federal agencies, namely the Justice Department, the U.S. Treasury, HUD and all national banking regulators, the task force is reviewing whether servicer’s reports of documentation errors indicate systemic abuse and misrepresentation. Having potentially broken federal law, and misled federal housing agencies such as the FHA (Federal Housing Administration,) wire and mail fraud are also being considered, according to the Post.
The fraud task force is meeting on Wednesday, October 20th, at HUD headquarters, per a report by, http://savemyhousenow.net. Led by Secretary Shaun Donovan, of the Department of Housing and Urban Development, HUD is convening the latest in a series of meetings with regulators and officials privy to details of the ongoing investigations.
Coming on the heels of last week’s announcement of a coordinated multistate investigation by all 50 state attorneys generals, the probe by federal agencies is helping to send somewhat mixed signals to consumers regarding the White House’s intentions. The current uproar over improper affidavits, which has compelled some very high profile banks to suspend foreclosures, underlines the rather awkward relationship between the banks and the Obama administration.
With their refusal to cave to consumer advocacy groups and lawmakers regarding a blanket, nationwide moratorium on foreclosures, White House officials have many homeowners up in arms. However, according to Press Secretary, Robert Gibbs, “We believe that every servicer should live up to the full extent of the law. And, their failure to do so should be met with accountability. We are in full support of what is being done at the state attorney general level.”
Gibbs also stated, “The Financial Fraud Enforcement Task Force of the Department of Justice is examining the issue, and the Attorney General has discussed publicly that the task force finds — if the task force finds any wrongdoing, that that also should be met with appropriate action. Failing to deal with the obligations under the law to live up to your responsibilities in mortgage servicing is a serious problem and has to be rectified by those servicers.”
Federal FHA regulators instigated a comprehensive review of FHA approved mortgage servicers, in an effort to more closely monitor foreclosure proceedings during the summer of 2010. Gibbs said that with reports surfacing of indiscriminately filed court documents, then FHA the rolled out a far more comprehensive review.
U.S. officials have been emphatic about demanding banks change their procedures if evidence surfaces proving homeowners were unjustly evicted.
“Nobody should lose their home through a mistake,” Mr. Donovan, of HUD, stated. “Even if it’s one person, it’s shameful….No matter how widespread it is, it’s wrong.”http://www.loansafe.org/fraud-task-force-starts-criminal-investigation-of-mortgage-servicers