Democrats want Holder to discuss issues with mortgage-fraud prosecutions


Attorney General Eric Holder. (AP/J. Scott Applewhite).
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Three House and Senate Democrats on Monday requested a meeting with Attorney General Eric Holder to discuss a federal audit that said the Justice Department has exaggerated its prosecution of mortgage fraud and made the crime a low priority.

Sen. Elizabeth Warren (D-Md.) and Reps. Elijah Cummings (D-Md.) and Maxine Waters (D-Calif.) expressed concern about the findings in a letter to Holder on Monday, but the they have not called for a congressional hearing to question him publicly.

The Justice Department’s inspector general released a report last week that said the agency “did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with DOJ’s public statements about the importance of pursuing financial fraud cases in general and mortgage fraud cases in particular.”

Auditors also determined that the number of agents investigating mortgage fraud and the amount of pending cases declined in 2011 despite Congress providing the FBI with $196 million to investigate the crime between 2009 and 2011.

MORE: DOJ inspector general says department not as tough as it claims on mortgage fraud

In a joint letter to Holder, the lawmakers said: “This report calls into question the department’s commitment to investigate and prosecute crimes such as predatory lending, loan-modification scams and abusive mortgage servicing practices,” the letter said.

Mortgage fraud contributed to the 2008 financial collapse, with brokers and lenders falsifying documents while homebuyers embellished their incomes and hid their debt. The schemes have since shifted to foreclosure-rescue and loan-modification scams, as well as other tactics that victimize consumers.

Warren served as chair of the Congressional Oversight Program that oversaw the Troubled Asset Relief Program (TARP), also known as the bank bailout. Cummings is the ranking member of the House Oversight and Government Reform Committee, and Waters is the top Democrat on the House Financial Services Committee.

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks@washpost.comVisit The Federal Eye, The Fed Page and Post Politics for more federal news. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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