Data previously reported by the Department of Justice, Department of Housing and Urban Development and Federal Trade Commission about the number of criminal defendants charged with allegedly abusing distressed borrowers was overstated by nearly 400 percent. The dollar amount involved was overstated by more than 900 percent.
In October 2012, U.S. Attorney General Eric Holder, HUD Secretary Shaun Donovan and FTC Chairman Jon Lebowitz boasted in a joint announcement that 530 criminal defendants, including 172 executives, were charged in 285 federal criminal indictments and informations as part of the government’s Distressed Homeowner Initiative.
The initiative, which was launched in October 2011, “focused on fraud targeting homeowners, such as foreclosure rescue schemes that take advantage of homeowners who have fallen behind on their mortgage payments.”
Turns out the total was vastly overstated, according to an “updated” press release issued on Friday that indicated just 107 criminal defendants were charged. The number of indictments was omitted from the latter announcement.
The original statement said that more than 73,000 victims suffered over $1 billion in losses.
But those numbers were revised down to 17,185 victims who suffered just $95 million in losses.
“An extensive review of the reported cases concluded that the original figures included in the Distressed Homeowner Initiative were not just criminal defendants who had been charged in fiscal-year 2012, as reported, but also a number of defendants who were the subject of other prosecutive actions — such as a conviction or sentence — in fiscal-year 2012,” the government explained. “In addition, the announcement included a number of defendants who were charged in mortgage fraud cases in which the victim(s) did not fit the narrow definition of distressed homeowner that the initiative targeted.”