Federal Mortgage Task Force May Act Soon

A federal task force formed to probe misconduct in the mortgage market during the run-up to the financial crisis may be getting ready to take action.

New York attorney general Eric Schneiderman, who co-chairs the Residential Mortgage-Backed Securities Working Group, said his office would pursue people who broke the law in the packaging and sale of securitized products, Reuters reported late this week.

Schneiderman added he expects his federal counterparts to do the same.

The Justice Department established the group in January.

"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," President Obama told Congress in his State of the Union address.

However, some watchdogs believe the federal government has done little to bring mortgage wrongdoers to justice. The Institute for America’s Future, a nonpartisan group investigating the nation’s housing crisis, recently issued a report saying the government’s efforts to prosecute wrongdoers—particularly on Wall Street—have fallen short and is asking for new, tougher laws on white collar crime.

As for the task force, assistant U.S. attorneys general Lanny Breuer and Stuart Delery, U.S. attorney for Colorado John Walsh and the Securities Exchange Commission's enforcement director, Robert Khuzami, serve with Schneiderman as co-chairs.

The task force oversees the work of more than 100 investigators, lawyers and analysts at the Department of Housing and Urban Development, the FBI, the Federal Housing Finance Agency, Justice and the New York attorney general's office.