Prepared Remarks of Secretary Shaun Donovan at the Distressed Homeowners Initiative Press Conference
Department of Justice
Tuesday, October 9, 2012
Thank you, Attorney General Holder.
We meet at an important moment -- after a long, painful fight back, filled with hardship and uncertainty for so many.
Thankfully, whether it’s home price increases that help homeowners get back above water or billions of dollars in new resources from the recent mortgage servicing settlement for families still at risk, homeowners are finally beginning to see the light at the end of the tunnel.
Still, even as we all look forward to turning the page on the recklessness of the past, we know that too many of the threats families face aren’t yet in the past.
And what the Financial Fraud Enforcement Task Force has found through its Mortgage Fraud Working Group is that some of the same types of scam artists that got us into this crisis in the first place--pushing predatory or fraudulent loans on families who simply wanted to own a home--continue to operate on the margins -- often preying upon the trust families have in HUD and the Federal Housing Administration.
Already, we have taken critical steps to enhance enforcement at FHA, which millions of families have turned to during this crisis -- withdrawing FHA approval for nearly 1,800 lenders, more than four times the number during the entire tenure of the previous Administration.
With these actions, we send a very clear message: that if you don’t operate ethically, transparently and within the bounds of the law, we will not hesitate to act.
Still, there are countless other scam artists who continue to prey upon homeowners facing foreclosure -- using websites and flyers that feature official logos to mislead desperate families about the help that’s available to save their homes.
In one California case, an operation tricked 200 distressed homeowners into thinking they were getting a mortgage modification when in reality they were really just pocketing these families’ money -- not only preventing these homeowners from getting the help they needed to save their homes, but literally stealing their mortgage payments in the process.
Thankfully, because of the Task Force, those in charge of this operation--and hundreds of others like it--have been charged or convicted for defrauding tens of thousands of victims -- and hundreds of millions of dollars in restitution have been ordered to be repaid.
I especially want to thank HUD’s Inspector General, David Montoya for his outstanding work as co-chair of the Mortgage Fraud Working Group.
Having worked with his office so frequently through the this crisis, when I learned the FBI approached them about the initiative, I was not surprised the Bureau not only found a willing partner -- but one who would connect this effort to additional resources.
Of course, our work does not end here. Families need to know that they should never, ever have to pay someone to get the help they need to save their home -- and that they can find local HUD-approved housing counselors on HUD’s website who are available free of charge, with no exceptions.
That’s one reason I was so proud that the historic $25 billion settlement the Administration and 49 bi-partisan state attorneys general struck earlier this year with the five largest mortgage servicers included funds states could use to fund housing counseling efforts.
And to date, nearly a quarter billion dollars remains available or has been committed by states for housing counseling -- and another $50 million for legal aid.
Ultimately, whether it’s the efforts of this Task Force, the enforcement action announced by the Residential Mortgage-Backed Securities Working Group last week, or resources provided by the Mortgage Servicing Settlement, each of these efforts sends the same message:
That when it comes to harming homeowners, no one is above the law -- and you will be held accountable.
That is why I’m so proud of these efforts -- and to stand here with our partners today.