Eric Holder Grossly Overstated Results of Mortgage Fraud Initiative

NEW YORK ( TheStreet) -- The Department of Justice said late Friday that it had overstated the results of a year-long mortgage fraud initiative in a press conference last October.

Attorney General Eric Holder, along with Housing and Urban Development chief Shaun Donovan and other federal officials of the Obama Administration's Mortgage Fraud Working Group had said that the "Distressed Homeowner Initiative," a nationwide effort to target fraud schemes that preyed upon suffering homeowners, had resulted in 530 criminal charges. The cases were said to have involved more than 73,000 borrowers with losses totaling $1 billion.

But the Federal Bureau of Investigation(FBI), which co-chairs the group, revised those numbers substantially on Friday. The number of criminal charges was in fact only 107, the FBI found. Federal agencies were asked to correct victim's losses to $95 million from $1 billion and the number of victims to 17,185 from more than 73,000.

The DoJ said in a release that the original report included defendants who had been charged even before the task force was set up. It also included victims who did not meet the narrow definition of "distressed homeowners."

"While all of the cases originally reported were part of our collective efforts to ensure stability and fairness in our financial and housing markets, these updated numbers reflect the subset of cases targeted by the Fiscal Year 2012 Distressed Homeowner Initiative," the DoJ said in an updated press release on the initiative.

According to Bloomberg, the corrected statistics were in response to the news organization's earlier story that pointed out inaccuracies in the original announcement.

The Justice Department then conducted an "extensive review" and found that the results were indeed overstated.

The Mortgage Fraud Working Group of President Obama's interagency Financial Fraud Enforcement Task Force was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.

The task force, chaired by Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement.

-- Written by Shanthi Bharatwaj New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

If you liked this article you might like

New Residential Construction Rises 18% in 2013 to Highest Level Since 2007

New Residential Construction Rises 18% in 2013 to Highest Level Since 2007

Citigroup Misses Estimates by a Wide Margin (Update 2)

Citigroup Misses Estimates by a Wide Margin (Update 2)

What to Expect From Citigroup Earnings

What to Expect From Citigroup Earnings

Mortgage Originations Projected to Drop Even Further in 2014

Mortgage Originations Projected to Drop Even Further in 2014

JPMorgan Posts Fourth-Quarter Profit of $5.3 Billion (Update 2)

JPMorgan Posts Fourth-Quarter Profit of $5.3 Billion (Update 2)