Saturday, January 28, 2012

Justice unit to probe mortgage-backed securities

(AP) ? Federal and state law enforcement officials announced Friday that they have launched a fraud-fighting initiative to root out wrongdoing in the market for residential mortgage-backed securities.

Attorney General Eric Holder told a news conference that bringing full enforcement resources to bear will help expose abuses and hold violators accountable.

Residential mortgage-backed securities are the huge investment packages of what turned out to be near-worthless mortgages that bankrupted many investors and contributed to the nation's financial crisis.

Appearing with Holder, New York Attorney General Eric Schneiderman, a co-chair of the initiative, said the effort will link state and federal probes of the mortgage-backed securities bubble.

The collapse in value of mortgage-backed securities resulted in unprecedented losses and "all of us" in law enforcement are dedicated to holding accountable financial institutions that lied and cheated and misled investors, said Robert Khuzami, director of the enforcement division at the U.S. Securities and Exchange Commission.

President Barack Obama disclosed the effort in his State of the Union address Tuesday night.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/386c25518f464186bf7a2ac026580ce7/Article_2012-01-27-Financial%20Probers/id-c91278fd8d9e4953b8eea330c39bdaaf

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