Feds Start Criminal Probe of Bank Foreclosure Mess

Lenders may have broken fraud laws with flawed paperwork
By John Johnson,  Newser Staff
Posted Oct 19, 2010 4:20 PM CDT
Feds Start Criminal Probe of Bank Foreclosure Mess
In this photo taken May 24, 2010, a man walks in front of a foreclosed home in Palo Alto, Calif.   (AP Photo/Paul Sakuma)

Banks have begun making moves to get foreclosures moving again, even as federal investigators begin a criminal investigation into the whole sorry affair, reports the Washington Post. The task force will look at whether banks broke wire and mail fraud laws or misled federal housing agencies by submitting flawed paperwork to take people's homes.

"We remain committed to holding accountable any bank that has violated the law," said White House press chief Robert Gibbs. He added that the White House supports a separate inquiry under way by state attorneys general. If the feds find evidence of wrongdoing, they could go after lenders and mortgage companies on both criminal and civil charges, insiders tell the Post. (Read more banking industry stories.)

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