One thing that the great national mortgage crisis of recent years readily signifies is that complex books often have many chapters.
A new one is currently being written, authored by outgoing U.S. Department of Justice Attorney General Eric Holder. Prior to turning his post over to successor Loretta Lynch, Holder has directed attorneys in his department to take a close look at mortgage fraud securities cases that might turn up individual wrongdoers for prosecution in criminal cases.
That would be somewhat anomalous, given the dearth of criminal cases that have resulted in the wake of the debacle that ensued short years ago and is still seeing rippling effects across the country. One of the most dire consequences of fraudulent activity committed pursuant to the so-called “subprime mortgage crisis” has been the high level of foreclosure-related actions that have now been ongoing for several years. Texas is frequently cited as a state where foreclosure activity has been comparatively widespread.
What has been especially notable regarding the mortgage crisis is the glaring fact that major bank officials deemed to have participated in fraudulent acts have escaped personal liability, especially criminal penalties. Holder’s department has been repeatedly and roundly criticized by many for its perceived laxity in pursuing prison terms for individual wrongdoers.
At the same time, though, commentators point out that the DOJ has secured a number of victories against lending institutions themselves in civil actions. Reportedly, about $37 billion has been taken from Wall Street banks to settle fraud cases.
Holder hopes to soon have a list of individual wrongdoers that he can present to Lynch. He states that she must ultimately “make determinations about whether further action is appropriate.”
Source: Bloomberg, “Holder asks lawyers to pursue bankers in mortgage fraud,” Keri Geiger, Feb. 17, 2015