U.S. Mortgage Group Forced to Correct Initiative StatsPhil Mattingly and Tom Schoenberg
President Barack Obama’s administration significantly overstated statistics from a year-long mortgage-fraud initiative, including total number of victims, their losses suffered and number of individuals criminally charged, according to an FBI memo.
The Federal Bureau of Investigation, in the document sent today, asked members of the administration’s Mortgage Fraud Working Group to correct and update any public materials related to the results released in October of a year-long law enforcement initiative targeting fraud schemes aimed at vulnerable homeowners.
The FBI restated the number of people criminally charged to 107 from 530. Agencies were asked to correct victims’ total losses to $95 million from an estimated $1 billion, and the number of victims found to 17,185 from more than 73,000.
“This targeted approach resulted in the successful filing of many criminal and civil cases around the country, but regrettably, the statistics reported in October included cases that fell outside the specific parameters of the initiative,” the FBI, which co-chairs the mortgage group, said in the memo.
The corrected statistics come in response to a Bloomberg News story reporting that some cases cited occurred before the initiative began in October 2011, including one filed by prosecutors more than two years before Obama took office.
The results of the nationwide initiative, which included undercover operations and a law enforcement surge in California, took place were initially presented at a Justice Department press conference that included Attorney General Eric Holder and Secretary of Housing and Urban Development Shaun Donovan.
The joint law enforcement activity came during the 2012 fiscal year.
Holder said at the time that the results indicated a “historic, government-wide commitment to eradicating mortgage fraud and related offenses across the country.”
The Justice Department, after questions were raised about the initiative, conducted an “extensive review” and found that the list included criminal defendants charged before the initiative and in circumstances outside the stated definition of “distressed homeowner” cases, the memo said
The “Distressed Homeowner Initiative” was a coordinated effort by federal law enforcement agencies, inspector general offices, the Justice Department and the Consumer Financial Protection Bureau. It came after the FBI began to recognize a sharp increase in frauds aimed at struggling homeowners in the years following the 2008 housing crisis, bureau Associate Deputy Director Kevin Perkins said at last year’s press conference.
Christopher Allen, an FBI spokesman, declined to comment beyond the memo.
The information used to compile the results came from an FBI survey of the agencies in the Financial Fraud Enforcement Task Force’s Mortgage Fraud Working Group.
Typical schemes involved promises to homeowners that foreclosures could be prevented by payment of a fee. As part of the scams, “investors” purchase the mortgage or the titles of homes are transferred them to accomplices, depriving homeowners of their property.
“Please be sure to update any online materials posted by your agencies to reflect these changes,” the FBI told the other agencies in the memo.
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