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Holder Asks Lawyers to Pursue Bankers in Mortgage Fraud


bloomberg.com | February 18, 2015

By Keri Geiger

(Bloomberg) -- U.S. Attorney General Eric Holder, who forced Wall Street’s biggest banks to pay billions in fines for their roles in the subprime mortgage crisis, is pressing for action against executives at those firms, even as he prepares to leave his post.

Holder, who is stepping down as soon as his successor, Loretta Lynch, is confirmed, has asked U.S. attorneys involved in residential mortgage-backed securities cases to report in 90 days on whether they can develop cases against individuals, he said Tuesday at the National Press Club in Washington.

“That will be a report ultimately that will be given to Loretta to make determinations about whether further action is appropriate,” Holder said.

Holder has faced criticism from lawmakers who said the Justice Department failed to hold bank executives responsible for their roles in the worst financial crisis since the Great Depression. His department also was faulted for resolving cases against banks with settlements that let them escape criminal charges by paying fines, improving controls and promising not to break the law.

President Barack Obama set up the Residential Mortgage Backed Securities Working Group in 2012 to coordinate prosecutions of fraudulent underwriting activity by banks that contributed to the financial crisis by pooling and reselling residential mortgage-backed securities.

Wall Street’s biggest banks, including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc., have paid nearly $37 billion to settle state and federal claims brought by the task force.
Civil Penalties

These cases were built on the 1989 Financial Institutions Reform, Recovery and Enforcement Act, a civil statue that allows the government to seek civil penalties for losses to federally-insured financial firms that occurred as long as a decade ago. Standard securities-fraud cases need to be brought within five years. FIRREA can be used against individuals as well as institutions and has less stringent liability requirements than criminal charges.

Bank of America, which acquired sub-prime lender Countrywide Financial Corp. in 2008, paid nearly $17 billion to settle claims against the bank and Countrywide in August.

In what could be the first major use of FIRREA against an individual over mortgage fraud, government attorneys are preparing a suit against Angelo Mozilo, Countrywide’s former chairman and chief executive officer, people familiar with the matter have told Bloomberg News. The effort follows the department’s decision to abandon a criminal probe of Mozilo.

Mozilo paid $67.5 million to the U.S. Securities and Exchange Commission in 2010 to resolve allegations he misled Countrywide investors. His lawyer has said there is no basis to pursue a further claim against him.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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