Lawmakers lash out over FBI's lax mortgage response

by Ryan Smith18 Mar 2014
Lawmakers are demanding to meet with the U.S. attorney general in the wake of a damning Justice Department report on the FBI’s lax response to mortgage fraud.

Three Democratic members of Congress – Sen. Elizabeth Warren and Reps. Elijah Cummings and Maxine Waters – have written to Attorney General Eric Holder requesting a meeting about the report, which claimed the FBI failed to give mortgage fraud investigation high enough priority at the height of the financial crisis.

“This report calls into question the Department's commitment to investigate and prosecute crimes such as predatory lending, loan modification scams, and abusive mortgage servicing practices,” the lawmakers wrote.

Michael Horowitz, the DOJ’s inspector general, wrote in the report that although the FBI had been directed to prioritize mortgage fraud, the agency ranked it as the lowest criminal threat during the height of the financial crisis. Horowitz also claimed that although the FBI received additional funding from Congress to pursue mortgage fraud cases, the cash wasn’t always spent for that purpose.

“The FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud,” Horowitz wrote.
The report also called into question the agency’s accuracy in reporting its own fraud prosecution statistics accurately – which didn’t sit well with Warren, Cummings and Waters.

“For most Americans, the purchase of a home is the single largest investment they will ever make and the single largest source of intergenerational wealth transfer,” they wrote. “…The number of Americans who have been victims of mortgage fraud is unknown and the Inspector General’s report indicates that the Department’s own data are unreliable indicators of the extent of the Department’s efforts to identify and prosecute those responsible for illegal lending schemes.”
 

COMMENTS

  • by Griff | 3/18/2014 12:26:30 PM

    Haven't we already anguished enough about what agencies failed us during the height of the housing crisis. The new enforcer is the cfpb. Spend time making sure they enforce and leave the what ifs behind. Or simply spend time on something that will matter to most Americans from this day forward. Hint.. it won't be trying to figure out why the FBI did not chase mortgage fraud way back when.

  • by Cheryl M | 3/18/2014 12:45:24 PM

    Here we are Once again, when was it that the FBI started answering to Warren and CUmmings? Unfortunately these mortgage fraud cases (if we haven't seen enough last a very long time) the law gives is up to 5 years for a case. Being that these cases are so large and involve so many people, banks, cross state lines, involve elected officials, etc. it could take some time. We read today about cases from 2007 and earlier at MPA. It's going to take sometime to get to 2014. Correct me if I'm wrong but when did the FBI start commenting on open, ongoing FBI cases to members of congress?

  • by Pat A | 3/18/2014 1:10:39 PM

    I feel so much better that Warren is focusing on mortgage fraud. I would hate for the FBI to be investigating real violent crime and homeland security - keep our mortgage safe - thanks Elizabeth.

Poll

Is TILA-RESPA a good or bad thing long term?