Report slams mortgage fraud efforts of FBI

by MPA14 Mar 2014
Federal agencies have been taken to task over their response to mortgage fraud in a scathing new report.

A report by a U.S. Justice Department internal watchdog has claimed the FBI failed to give mortgage fraud investigation high enough priority at the height of the financial crisis, Reuters has reported. The Department of Justice's inspector general, Michael Horowitz, claimed in a report that the FBI ranked mortgage fraud as its lowest criminal threat at the height of the financial crisis, even though the DOJ had directed that mortgage fraud investigation was to be prioritized.

Moreover, the report claimed that federal investigators received a significant amount of additional Congressional funding to pursue mortgage fraud, but that the FBI did not always direct the funds for that purpose.

"The FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud," Horowitz said in the report.

Horowitz also pointed to DOJ problems in reporting mortgage fraud efforts. He said the agency, at an October 2012 press conference, mistakenly inflated the results of its mortgage fraud prosecutions by 90 percent.

In response, the DOJ pointed to the increase of mortgage indictments and convictions. Spokeswoman Ellen Canale said the number of mortgage fraud indictments nearly doubled between 2009 and 2011, while the number of convictions also rose by more than 100%.


Should CFPB have more supervision over credit agencies?