April 8, 09

NEWS / Remarks as Prepared for Delivery by Attorney General Eric Holder at the Foreclosure Rescue Scams and

For millions of Americans, the dream of home ownership has become a nightmare. The unscrupulous actions of individuals and companies who exploit the misfortune of others is despicable, immoral, and illegal.

The FBI is investigating more than 2,100 mortgage fraud cases, up almost 400 percent from five years ago. The Bureau has more than doubled the number of agents investigating mortgage scams, has created a National Mortgage Fraud Team at headquarters in Washington, and is working hand-in-hand with our partners at other agencies.

Within just the past few months, the Department has obtained important convictions against perpetrators of rescue schemes. We convicted defendants in Kansas who solicited homeowners going through foreclosure, told them that for a fee they could help them keep their homes, and then filed fraudulent bankruptcy petitions on their behalf.

We convicted individuals who targeted homeowners in Brooklyn and the Bronx for a rescue scheme. The defendants induced homeowners to "sell" their homes to "straw buyers" on the false promise that they would get them back after they were saved from foreclosure. The distressed homeowners lost title to their homes and faced eviction, and the lenders suffered losses from the defaulted loans.

We are working with the FTC to reinvigorate the Executive Working Group, which brings together DOJ, the FTC, and state attorneys general to coordinate and exchange intelligence on competition and consumer fraud issues, such as the rescue scams we are addressing today. We look forward to working with Treasury and HUD to share intelligence so that we can target each new scheme as it arises and hold those who prey on vulnerable homeowners accountable.

We are also committed to ensuring that homeowners who may be having difficulty making their mortgage payments do not experience discrimination and can benefit in equal measure from legitimate loan modification programs and other federal programs to provide mortgage assistance and stabilize home prices.

Already, we are hearing increasing concerns that not all distressed borrowers are receiving the same opportunities for loan modifications. We are also hearing that the terms and fees for such modifications are not being made available on a non-discriminatory basis.

Lending discrimination prevents those who are discriminated against from enjoying the benefits of access to credit, including reasonable mortgage payments, so they can stay in their homes and provide much needed stability for their neighborhoods.

Let me be absolutely clear: Discrimination in lending on the basis of race, national origin or other prohibited factors is destructive, morally repugnant, and against the law. And we will use the full range of our enforcement authority to investigate and prosecute this type of unacceptable lending discrimination.

To sum up, I’d like to speak directly to those individuals and companies whose illegal and repulsive practices have harmed far too many Americans. My message is simple: If you prey on vulnerable homeowners with fraudulent mortgage schemes, or discriminate against borrowers, we will find you and we will punish you.