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Tag Archives: Justice Department

Lawmaker Presses for Criminal Investigation of GSEs

Sen. Scott Brown of Massachusetts says the civil lawsuit filed by the Securities and Exchange Commission (SEC) last week against six former executives of Fannie Mae and Freddie Mac ""does not go nearly far enough."" Brown is pressing the Department of Justice and the SEC to immediately open criminal investigations into Fannie and Freddie. The senator says authorities need to take a closer look at the GSEs' business dealings prior to the housing collapse and their disclosure of subprime mortgage holdings.

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Justice Department Reaches Settlement for Discriminatory Lending

The Justice Department announced Wednesday a $335 million agreement to settle allegations against Countrywide of discriminatory lending from 2004 to 2008. This settlement is the largest the department has ever reached regarding fair lending. Countrywide allegedly discriminated against 200,000 minority borrowers by charging them higher interest rates than white borrowers with matching creditworthiness and financial status. The money will go to those borrowers harmed by Countrywide's practices.

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U.S. Fines New York Law Firm $2M for Improper Foreclosures

One of New York's largest-volume foreclosure law firms has signed on to an agreement with the U.S. Department of Justice, requiring the firm to pay $2 million and change its foreclosure practices - a case that market observers say could set a national precedent. The law firm of Steven J. Baum, P.C. has been the subject of a six-month investigation into whether the firm, on behalf of its lender clients, filed misleading pleadings, affidavits, and mortgage assignments related to foreclosure actions in both state and federal courts in New York.

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Two California Investors Plead Guilty to Bid Rigging

Two real estate investors are pleading guilty to mail fraud and bid rigging at public foreclosure auctions in Northern California, according to the Department of Justice. The investors conspired with others to quash competition for properties at foreclosure auctions in Alameda and Contra Costa counties in 2009 and 2010. The duo also admitted to committing mail fraud by using mail to organize their own private auctions open only to co-conspirators.

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HUD and Justice Department Seek Support for Servicer Settlement

New York, Nevada, Massachusetts, and Delaware attorneys general continue to voice opposition to a blanket settlement with the nation's top servicers, but HUD and the Justice Department are taking steps to persuade at least one of them to comply. Officials from both agencies are specifically asking New York Attorney General Eric Schneiderman to abandon his objections and approve the settlement. He's reportedly holding out to ensure he can pursue his own legal actions related to the securitization side of the business.

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California Officials Take Down National Foreclosure Rescue Fraud Ring

California's attorney general and the state's Department of Justice have taken down a fraud ring of legal firms and attorneys that officials say swindled thousands of homeowners out of millions of dollars by convincing them to take part in mass lawsuits against their lenders. Attorney General Kamala Harris has sued three law firms, four lawyers, and 14 other defendants. Officials with the state and HUD have seized the defendants' assets and bank accounts.

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Justice Department Joins Investigation of S&P

Investigators are looking to determine whether Standard and Poor's (S&P) over-rated dozens of mortgage-backed securities prior to the financial crisis. The Securities and Exchange Commission has been investigating the matter for several months, and the Justice Department recently joined the investigation, according to media reports. The federal probe began before S&P downgraded the U.S. credit rating from triple-A status to double-A status. The SEC has reportedly also been investigating Moody's in regards to two mortgage-bond deals.

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National Mortgage Fraud Remains Relatively Steady, Shifts Regionally

On a national level, mortgage fraud risk has declined 2.3 percent over the year but has remained relatively steady for the last five quarters, according to Interthinx's second-quarter risk report. Three states where the risk of mortgage fraud remains highest are Nevada, Arizona, and California. Separately, the FBI released its own report, citing short sale fraud as a growing problem. The FBI says industry insiders and organized crime groups from overseas are the most common perpetrators of mortgage fraud.

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U.S. Sues Founder of MDR Mortgage for Defaulted FHA Loans

The U.S. Department of Justice has filed a civil lawsuit against Robert S. Luce, founder and president of MDR Mortgage Corp. a mortgage lending business located in Palatine, Illinois. The complaint centers around 90 Federal Housing Administration (FHA) loans that went into default. According to the complaint, HUD was required to pay more than $1.6 million in insurance claims on the loans, which Luce and MDR were not authorized to originate.

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Bank of America Weighs Principal Forgiveness in Settlement Talks

In its own private negotiations with state attorneys general and officials at HUD and the U.S. Justice Department, Bank of America is reportedly bringing principal reductions to the bargaining table. BofA and four other mortgage servicers have been in discussions with state and federal officials to settle investigations into foreclosure practices involving faulty paperwork and illegal affidavits, but talks have stalled. To move things along, BofA has put forth its own proposal for principal write-downs in exchange for liability protections.

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