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DOJ Lies, Lies, and Damn Lies re: Mortgage Fraud

Posted by Larry Doyle on March 14, 2014 9:21 AM |

When people knowingly misrepresent critically important information to you and do so on a repeated basis, why would you ever trust them?

Human nature being what it is, you would not.

That is exactly the quandary the Department of Justice finds itself in currently. How so? Let’s navigate and review a recently released report from none other than the Inspector General’s Office of the Department of Justice which outlines how the DOJ repeatedly delivered grossly exaggerated information to the American public regarding mortgage fraud investigations.  

I draw attention to this embarrassing reality in my book. I pay props in the book and here to the folks at Bloomberg and specifically the fabulous journalist Jonathan Weil, who writes:

It has been 17 months since U.S. Attorney General Eric Holder held a news conference to tout the successes of a high-profile task force on mortgage fraud. And it has been seven months since the Justice Department admitted that the crime statistics he trumpeted there were grossly overstated.

How bad was it? At the carefully scripted October 2012 media event, Holder said the department’s Distressed Homeowner Initiative had resulted in charges against 530 criminal defendants, including 172 executives. The actual number of defendants was 107, or 80 percent less, and the department hadn’t tracked how many of them were executives. Similarly, Justice originally said the losses to homeowners were $1 billion. It later cut that figure to $95 million, while the number of victims was revised to 17,185 from 73,000.

Bloomberg News published an article shortly after Holder’s news conference pointing out that the government’s numbers included cases that occurred before the initiative began in 2011. I wrote about the cooked numbers, too, both before and after the Justice Department corrected them.

The department’s Office of the Inspector General released today a 52-page audit report examining Justice’s efforts to address mortgage fraud.

The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the [Financial Fraud Enforcement Task Force’s] and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the department regarding its mortgage fraud efforts, as well as the department’s serious failure to adequately vet information that it was presenting to the public.

Only days after the press conference the department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the department should have been more forthright at a much earlier date about this flawed information.

Ponder that information folks. If that is not the definition of scandalous activity if not outright lying to the American public I do not know what is.

In a response letter, Deputy Attorney General James Cole said: “While the errors associated with the data in the initial [Distressed Homeowner Initiative] announcement were related to the unique nature of that effort, the department has committed to putting robust measures in place to help ensure correct reporting of future data in press releases and conferences.”

Same old garbage. Government officials lie to the American public in repeated fashion, issue a token mea culpa, and life goes on.

Is this what our country has come to?

He said the department concurred with the audit report’s recommendations regarding data collection and reporting.

There are some important questions the report failed to address: Were any officials at Justice or the FBI deliberately trying to inflate the numbers? And did anyone there turn a blind eye to their falsity before the numbers were released publicly? The report makes the errors out to be some sort of bureaucratic bungle — “breakdowns in the process” it called them — caused by ill-informed government workers who didn’t know the proper way to collect data.

“Breakdowns in the process?”

ROFLMAO.

Is that what repeated and intentional misrepresentations are called in and around Washington DC?

Where I come from, this sort of activity is referred to as “Lies, lies, and damn lies.”

Trust Uncle Sam?

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or receiving it via e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

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The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Virginia51

    Oh damnit – just start reading the patents. This entire securitization scheme is in the USPTO starting in the early 1990s – read the patents! These were not traditional mortgages and notes – they were quasi-securities as the 1003 loan application was dipped into the securitization process in a “seamless automation” from the very beginning – and originators sold the products without securities licensing. That’s why Sheila Bair calls these NTMs (nontraditional mortgages). There are no statutes for these products and the borrowers had no disclosure.

    This makes what Jordan Belfort did a “walk in the park” in comparison.

    IMHO – if all the DOJ and courts are going to do is issue fines and slaps on the wrist – they they should be required to find and seize, disallow and expunge the patents. Make the very essence of securitization patenting have to be reviewed and approved by Congress – then maybe they’ll begin to understand how these crooks are raping America!






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