New Initiative to Coordinate Probes into Mortgage Fiasco

Joint state and federal initiative

A new effort by the Obama Administration to investigate what triggered the national mortgage fiasco will focus upon matching up the many overlapping federal and state inquiries and holding those accountable whose transgressions led to the world wide financial crisis. A team consisting of 55 agents, attorneys, and analysts is being assembled to try and quickly to speed up ongoing probes and launch several new investigations into the high risk mortgage-backed securities which disintegrated, Justice Department representatives said on Thursday.

Eric Schneiderman, New York Attorney General

Two other primary goals of the endeavor are to return the money to those injured by the collapsing mortgage-backed securities marketplace and to offer relief for homeowners who are still struggling to get right side up from the successive recession. The joint state and federal initiative, which President Obama remarked during the State of the Union address on Tuesday, will go after misconduct by financial organizations and go after criminal charges against those individuals who abused the law, Justice Department officials remarked. "This new entity will hold those accountable who violated laws, speed up homeowner assistance and help to end a recklessness era that injured so many American citizens," Obama remarked in his address

On the book, 'Reckless Endangerment' How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon - a recount of the screwing Americans got by just about anyone with any power: inept watchdogs, dirty politicians, plus an insatiably greedy financial community with better sense although they didn't care. NY Times reporters Joshua Rosner and Gretchen Morgenson have spent time investigating not just the actors in the financial chaos of 2008 however 15 years previously as president Bill Clinton got behind some dubious idea that everyone needs to get in on the American dream of owning their own home.

Liberal activists and a few Democratic legislators have been pushing Obama for several months to initiate a broader scrutiny into the origins of the financial calamity. Eric Schneiderman, New York Attorney General and U.S. Attorney Gen. Eric Holder and will reveal the special working faction on Friday in Washington D.C.. Schneiderman is one of the more aggressive officials in investigation of the mortgage fiasco. Lisa Madigan, Illinois Attorney General has also joined with the group, while federal officials foresee adding additional state attorneys general. A representative for Kamala D. Harris, California Attorney General said she would be "happy to give her support" in any way feasible. Harris already has assembled her very own 50-person team investigating mortgage fraud.

This new initiative will become part of the already in place Financial Fraud Enforcement Force, the administration put together in 2009 for better coordination of federal efforts to zero in on violations, like insider trading , Ponzi schemes, and investment scams. The latest effort sprang out of realizing there was a great deal of overlap withn various state and federal inquiries into packaging mortgages into investment securities along with a need for improving coordination between individual states and the feds. Schneiderman will head up state officials appointed to the unit, named the Residential Mortgage-Backed Securities Working Group. They are now making a collaborative effort to bring everything together and aggressively move forward to deal with those issues," Schneiderman said.

Also a co-chair to the unit will be Lanny Breuer, Assistant Attorney General , who heads up the criminal division of the Justice Department; Tony West, Assistant Attorney General, who is head of the departmentís civil division; enforcement director at the Securities and Exchange Commission, Robert Khuzami, and John Walsh U.S. Attorney in Colorado. The working unit will also include representatives from the Consumer Financial Protection Bureau, the Department of Housing and Urban Development, Consumer Financial Protection Bureau, the FBI and the Treasury Department. The unit will begin with a 25 person staff which includes 15 criminal and civil lawyers plus 10 investigators, including some FBI agents with an ultimate goal of putting a unit of 55 together "in a very short time frame," the officials said, who requested anonymity as they had no authorization to speak publicly prior to an official statement. The officials also would not remark upon the amount of money would be expended upon the effort however promised "significant resources" were going to be deployed.

New Article - Jan 31, 2012

Real Estate Finance