ForeclosureGate: Financial Fraud Enforcement Task Force Begins Investigation

Posted by AzBlueMeanie:

Monopolyb The Obama administration is trying to get out ahead of the burgeoning ForeclosureGate scandal. Task force probing whether banks broke federal laws during home seizures:

The Obama administration's Financial Fraud Enforcement Task Force is in the early stages of an investigation into whether banks and other companies that submitted flawed paperwork in state foreclosure proceedings may also have misled federal housing agencies, which now own or insure a majority of home loans, according to these sources.

The task force, which includes investigators from the Justice Department, Department of Housing and Urban Development and other agencies, is also looking into whether the submission of flawed paperwork during the foreclosure process violated mail or wire fraud laws. Financial fraud cases often involve these statutes.

The probe is unfolding as the administration seeks to send a public message that banks or other companies that broke the law would be held accountable. After freezing foreclosures in many states amid reports of improper foreclosures, banks are now preparing to submit new paperwork and resume the process of seizing homes. Members of the task force and other administration officials are set to hold a wide-ranging meeting Wednesday to discuss the issue at HUD. That will be followed by a White House briefing by HUD Secretary Shaun Donovan and the task force executive director, Robb Adkins, an administration official said.

"As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law," White House press secretary Robert Gibbs said in a statement Tuesday. "The administration's Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process."

Gibbs also said the administration is strongly supporting a parallel probe by every state's attorney general. Foreclosure law is largely the domain of state courts.

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[I]f lenders or other mortgage companies have been reimbursed based on false or inaccurate paperwork, the government could seek both civil and criminal penalties, people familiar with the matter said.

No specific target of the investigation has been identified.

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