Schneiderman
Holder
WASHINGTON (Legal Newsline) - The formation of a new national mortgage crisis unit is now official.
On Friday, U.S. Attorney General Eric Holder held a press conference and announced the members of the unit, along with its goals.
Last week, President Barack Obama announced the creation of the unit during his State of the Union address.
"Tonight, I'm asking my Attorney General to create a special unit of federal prosecutors and leading state attorney general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis," Obama said Tuesday.
"This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."
The Residential Mortgage-Backed Securities Working Group will operate as part of the government's Financial Fraud Enforcement Task Force.
The working group brings together federal, state and local agencies, including the U.S. Department of Housing and Urban Development, FBI, IRS, the Consumer Financial Protection Bureau, the Financial Crimes Enforcement Network and the Federal Housing Finance Agency Office of Inspector General.
Among the group's members are Director of Enforcement for the U.S. Securities and Exchange Commission, Robert Khuzami; Secretary for the U.S. Department of Housing and Urban Development, Shaun Donovan; New York Attorney General Eric Schneiderman; U.S. Attorney for the District of Colorado, John Walsh; Assistant Attorney General for the Justice Department's Civil Division, Tony West; and Assistant Attorney General for the Criminal Division, Lanny Breuer.
"These, and many other, task force members have been conducting investigations into the residential mortgage-backed securities market -- as well as related aspects of the housing market -- for some time. And they've seen firsthand how massive failures in this market were a driving force behind the nationwide housing collapse that has had devastating effects for investors, consumers, and entire communities," Holder said.
The group held its first full meeting Friday following the press conference.
Holder said it would immediately start working to "streamline and strengthen" current and future efforts to "identify, investigate and prosecute instances of wrongdoing in the packaging, selling and valuing of residential mortgage-backed securities."
"My No. 1 to commitment to the American people is that we will continue to devote significant resources to combating financial fraud and be as aggressive and creative as we can be in holding accountable those who, in violating the law, contributed to the financial crisis," he said.
Holder said currently 15 attorneys, investigators and analysts are working with the group. In addition, the FBI has assigned 10 agents and analysts. Another 30 attorneys, investigators and support staff members from various U.S. Attorneys' Offices also will join the group, he said.
Already, the group's co-chairs have met to discuss the structure of its efforts, how teams should and will be organized, and how information will be shared, Holder said Friday.
Schneiderman, one of the co-chairs, said last week the idea behind the group is to focus on the actions that created the financial crisis, not the abuses that came later.
"The American people deserve a robust and comprehensive investigation into the global financial meltdown to ensure nothing like it ever happens again, and today's announcement is a major step in the right direction," he said in a statement Tuesday.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.