Justice unit to probe mortgage-backed securities

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WASHINGTON (AP) — Federal and state law enforcement officials have launched a fraud-fighting initiative to root out wrongdoing in the market for residential mortgage-backed securities.

Attorney General Eric Holder says that bringing full enforcement resources to bear will help expose abuses and hold violators accountable.

Residential mortgage-backed securities are the huge investment packages of what turned out to be near-worthless mortgages that bankrupted many investors and contributed to the nation’s financial crisis.

New York Attorney General Eric Schneiderman is a co-chair of the initiative. He says the effort will link state and federal probes of the mortgage-backed securities bubble.

The attorney general announced the effort Friday with federal and state officials. President Barack Obama disclosed it in his State of the Union address Tuesday night.

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