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Highlights

One of the most devastating aspects of the current financial crisis for homeowners is the prospect of losing their homes to foreclosure, and many homeowners have fallen victim to foreclosure rescue and loan modification schemes. In 2009, the administration created the Financial Fraud Enforcement Task Force (FFETF), which is led by the Department of Justice (DOJ), to combat these and other financial crimes. This report examines (1) the nature and prevalence of these schemes, (2) federal efforts coordinated to combat these schemes and other major efforts, and (3) factors that may affect federal efforts' success in combating these schemes. To address these objectives, GAO obtained information from federal agencies participating in the FFETF and interviewed representatives of five states with high exposure to potential foreclosures and nonprofit organizations undertaking related activities.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of the Attorney General 1. To develop a comprehensive strategy for the FFETF's Mortgage Fraud Working Group's efforts to combat mortgage fraud, the U.S. Attorney General, as the head of the FFETF, should develop clear, long-term strategies and performance measures that the working group can use to evaluate its progress toward achieving its long-term goal of increasing enforcement in the area of mortgage fraud.
Closed - Implemented
For calendar years 2012 and 2013, the Department of Justice, as the head of the Financial Fraud Enforcement Task Force, developed strategic scorecards to set performance measures and goals to evaluate the task force's progress toward combating foreclosure rescue schemes. According to DOJ officials, they developed the scorecard in direct response to the report recommendations. The scorecards identified specific activities related to combating foreclosure rescue schemes such as providing training to law enforcement agencies, educating distressed homeowners, and holding regional summits. The scorecards also identified agencies accountable for each activity, as well as goals specific to each activity.
Office of the Attorney General 2. To develop a comprehensive strategy for the FFETF's Mortgage Fraud Working Group's efforts to combat mortgage fraud, the U.S. Attorney General, as the head of the FFETF, should, to the extent that the working group considers foreclosure rescue schemes to be a priority, develop strategies specific to these schemes, including those that enhance coordination of law enforcement agencies and that provide consumer education.
Closed - Implemented
For calendar years 2012 and 2013, the Department of Justice, as the head of the Financial Fraud Enforcement Task Force, developed strategic scorecards to set performance measures and goals to evaluate the task force's progress toward combating foreclosure rescue schemes. According to DOJ officials, they developed the scorecard in direct response to the report's recommendations. The scorecards identified specific activities related to combating foreclosure rescue schemes such as providing training to law enforcement agencies, educating distressed homeowners, and holding regional summits. The scorecards also identified agencies accountable for each activity, as well as goals specific to each activity.

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