Obama Fraud Task Force Takes on the Big Banks

August 9, 2013
mortgage lending news

The Residential Mortgage Backed Securities Working Group, which was set up to investigate causes of the financial crisis, has gained traction as the U.S. Justice Department recently announced a criminal investigation into JPMorgan Chase & Co.'s mortgage-backed securities practice. This latest enforcement action stems from the working group's analysis of the financial crisis, enabling the Obama Administration to coordinate prosecutions of fraudulent underwriting activity by banks. "Over the last year and a half, the RMBS Working Group members have been aggressively investigating multiple cases across the country and the public is only beginning to see the results," said Justice Department Associate Attorney General Tony West. The JPMorgan probe also could lead to civil investigations and prosecutions, though it may not result in criminal charges. Among the other actions based on the working group's analyses are the Justice Department's civil suit against Standard & Poor's and New York Attorney General Eric Schneiderman's case against JPMorgan's actions with regard to its Bears Stearns Cos. subsidiary. "The President's Working Group continues to meet and make progress in its efforts to hold banks accountable for the crash of the housing market and the collapse of the American economy," said Schneiderman. Much of the group's work has been on the civil side tied to a 1989 statute that allows the government to seek civil penalties for losses to federally-insured financial firms that occurred as long as a decade ago.
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