Four years after President Obama promised to crack down on mortgage fraud, his administration has quietly made the crime its lowest priority and has closed hundreds of cases after little or no investigation, the Justice Department’s internal watchdog said on Thursday, The New York Times reported yesterday. The report by the department’s inspector general undercuts the president’s contention that the government is holding people responsible for the collapse of the financial and housing markets. In particular, the administration has been criticized for not pursuing large banks and their executives. The inspector general’s report shows that the FBI considered mortgage fraud to be its lowest-ranked national criminal priority. The FBI received $196 million from fiscal years 2009-11 to investigate mortgage fraud, the report said, but the number of pending cases and agents investigating them dropped in 2011. In 2012, the government reached a $25 billion civil settlement with the nation’s five largest mortgage servicers. Last year, the Justice Department announced a $13 billion settlement with JPMorgan Chase over the bank’s questionable mortgage practices. Members of Congress and others have criticized the Obama administration for going too easy on Wall Street banks and not taking mortgage fraud seriously enough.
