Details on intensified plan to root out mortgage-securities fraud

Calling this a "make or break time for the middle class," HUD Secretary Shaun Donovan joined federal and state law enforcement officials Friday in detailing a plan to uncover fraud in the residential mortgage-backed-securities market.

The Housing and Urban Development chief joined U.S. Attorney General Eric Holder and other Obama administration officials at a news conference at the Department of Justice in Washington to announce formation of a "working group" to investigate mortgage-securities fraud.

In his State of the Union address Tuesday, President Obama announced the creation of a group to bolster the efforts of his Financial Fraud Enforcement Task Force, which was created in 2009.

Holder said the working group would include Justice Department lawyers, analysts, agents, and investigators from around the country, as well as those in other federal agencies and state governments already looking into mortgage-market abuses.

"With this focus on collaboration - and by bringing our government's full enforcement resources to bear - I have no doubt," Holder said, "that we will improve our ability to recover losses, to prevent fraud, to bring abuses to light, and to hold those who violate the law accountable."

Robert Khuzami, enforcement director of the Securities and Exchange Commission, said his group had issued scores of subpoenas, obtained millions of documents, and interviewed dozens of key witnesses in cases of suspected mortgage-backed-securities fraud.

Donovan said the working group would build on the work of the task force "by investigating misconduct in the pooling and sale of residential-mortgage-backed securities."