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Feds probing possible criminal violations in home foreclosure crisis

By Terry Frieden, CNN Justice Department Producer

October 19, 2010 5:34 p.m. EDT

A government task force dealing with foreclosure issues has scheduled a meeting for Wednesday.

STORY HIGHLIGHTS

• A federal task force is investigating potential fraud in the foreclosure crisis
• The task force will meet Wednesday, and a White House briefing is likely afterwards

RELATED TOPICS

• Foreclosures
• Federal Housing Administration

Washington (CNN) -- Federal law enforcement officials said Tuesday the probe of potential fraud by financial firms in the foreclosure crisis includes an investigation into possible criminal violations of federal laws.

Two sources familiar with the federal Financial Fraud Enforcement Task Force indicated the multi-agency effort by investigators in the Justice, Treasury and Housing departments would determine whether prosecutors would ultimately pursue criminal or civil penalties -- or both.

The task force has scheduled a meeting for Wednesday at the Department of Housing and Urban Development. Upon conclusion, a briefing is likely at the White House, officials said.

"The administration's Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process," White House Press Secretary Robert Gibbs confirmed Tuesday. "We remain committed to holding accountable any bank that has violated the law," he said.

Growing concern over flawed paperwork by banks and other lenders in foreclosure proceedings has prompted growing anger and confusion in the housing market. Some banks temporarily froze foreclosures, but are now indicating plans to resume seizing homes after reviewing new paperwork.