White House Task Force Is Probing Foreclosure Fraud

The problem's gotten too big to ignore, and the White House is wise to finally jump out in front of this growing scandal:

Federal law enforcement officials are investigating possible criminal violations in connection with the national foreclosure crisis, examining whether financial firms broke federal laws when they filed fraudulent court documents to seize people's homes, according to people familiar with the matter.

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. The task force is holding a wide-ranging meeting Wednesday to discuss the issue at HUD, which 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."

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