A top House Democrat said Thursday that he is troubled by the lack of Justice Department action on mortgage fraud despite being provided with millions in resources from Congress.
Rep. Elijah Cummings, ranking member of the House Oversight and Government Reform Committee, said he is “deeply troubled” that the Justice Department failed to give the issue greater priority, despite public statements to the contrary.
{mosads}The Maryland Democrat said his constituents have faced predatory lending, loan modification scams and abusive mortgage servicing practices.
A report released Thursday by the Justice Department’s inspector general found that he agency overstated its efforts between 2009 and 2011 to combat mortgage fraud and had no good way to determine exactly how many cases it was pursuing.
That led to the release of inaccurate figures being released at a high-profile press conference in October 2012, according to the report.
“I am also concerned that the DOJ publicly cited inflated and unreliable statistics regarding the number of mortgage fraud prosecutions it has initiated,” Cummings said.
At that time, Attorney General Eric Holder said a task force had reined in 530 criminal defendants, tied to cases involving 73,000 homeowners victims and total losses of more than $1 billion.
But upon closer inspection the numbers fell sharply to 107 criminal defendants the total victims dropped to about 17,000, and the total estimated losses was just $95 million — 91 percent below the initial claim.
Justice received $196 million to ramp up hiring to investigate mortgage fraud cases but the report determined in 2011 the number of FBI agents investigating mortgage fraud, as well as the number of pending investigations, decreased.
Cummings said he intends to seek a briefing from the attorney general “to understand what can be done to ensure the DOJ is finally prioritizing its responsibility to protect consumers from mortgage fraud.”
The audit report makes seven recommendations to help the DOJ improve its understanding, coordination, and reporting of its efforts to address mortgage fraud.