Rep. Fattah: Step Up FBI Probe of Mortgage Fraud

Business Wire, Sept 24, 2008

WASHINGTON -- Congressman Chaka Fattah (D-PA), a member of the House Appropriations Committee and its Subcommittee on Science, State, Justice and Commerce, and Related Agencies, which oversees discretionary spending of the Justice Department, FBI and other agencies, issues the following statement:

"The Federal Bureau of Investigation and its director, Robert Mueller, should be commended for stepping up its investigation of mortgage fraud and possible criminal activities related to the growing national financial crisis. This investigation must be pursued in the most vigorous and far-reaching manner.

"This is an overdue course of action I have been advocating as the crisis deepened. In a letter to Director Mueller on August 25, 2008, I questioned the lack of FBI resources allocated to its criminal investigations unit regarding mortgage fraud. Calls for a stepped up investigation into the criminal as well as financial implications of the crisis are at the heart of legislation cleared this week by the House Energy and Commerce Committee, and in a bill approved by the House Monday calling for an FBI nationwide mortgage fraud coordinator.

"While the Congress debates possible financial remedies, it is not enough to dismiss this crisis as a product of greed and poor judgment. Evidence is mounting daily that actual crimes have been committed in the manipulation of financial markets and in deceptive practices that preyed upon unwitting consumers and borrowers. It is the responsibility of the FBI to investigate thoroughly and bring any perpetrators to justice."

A text of the letter Congressman Fattah sent to Director Mueller last month can be viewed below:

August 25, 2008

Mr. Robert Mueller
Director
Federal Bureau of Investigation
J.Edgar Hoover Building
935 Pennsylvania Avenue, NW
Washington, DC 20535-0001

Dear Director Mueller;

I am requesting that your office conduct a formal investigation concerning the lack of resources allocated to the FBI's criminal investigations unit regarding mortgage fraud.

Reports that agency officials knew of a growing crisis, but failed to provide adequate resources to investigate unscrupulous mortgage companies have left millions of homeowners in the regrettable position of foreclosure. Across the nation, 1.5 million American families are struggling to satisfy their mortgage obligations. Many of these homes are now facing imminent foreclosure.

According to officials within the FBI, the present mortgage crisis was predictable. Failure to avert the mounting predicament was due to a lack of personnel dedicated to probe questionable lender procedures. Instead, the agency had its focus on countering terrorism when all the while domestic terrorism was at the doorstep of every American household.

I call on your office to investigate whether the FBI negligently failed to respond to warnings of fraud and abuse within the industry. It appears that more should have been done to avert the escalating rise in sub-prime mortgages. The agency's lack of intervention may have contributed to the swelling tide of nationwide foreclosures.

Our citizens deserve accountability. They need to know if the federal government was doing everything possible to keep the mortgage industry free from infiltration of criminals who wanted to prey on those who were financially uninformed and unsophisticated.

I look forward to your positive response to this request.

Very truly yours,
Chaka Fattah
Member of Congress