Many mortgage indictments seen under Obama

WASHINGTON (Reuters) - Federal criminal probes into mortgage lending will likely produce many indictments under Barack Obama's presidency, legal experts said on Wednesday.

"I think the momentum has already started," said Arthur Culvahouse, a White House counsel under President Ronald Reagan and chairman of the O'Melveny & Myers law firm in Washington.

"I expect that we will have plenty of indictments," he told a Brookings Institution seminar on the outlook for President-elect Obama's legal policy.

Culvahouse noted the FBI has assigned scores of agents to investigate the fallout of the mortgage industry collapse, and federal grand jury probes were under way in New Hampshire and New York.

The FBI said in September it was probing 26 cases of possible corporate fraud related to the collapse of the mortgage industry. The investigations are said to include major mortgage lenders as well as insurer American International Group Inc.

During the campaign, Obama blamed the mortgage debacle and resulting financial crisis on lax government oversight, and promised to establish stiff penalties for mortgage fraud. As a senator, he has proposed spending more on state and federal law enforcement and imposing new penalties for mortgage fraud.

However, prosecutors may be asked to follow more uniform standards in deciding whether to bring cases.

Robert Litt, an Obama fundraiser and former senior Justice Department official, said there needed to be "national decision-making" on prosecution of mortgage crimes, as opposed to relying on a patchwork of standards.

"You don't want individual United States Attorneys making decisions about certain things in a vacuum. I don't want the Middle District of Tennessee applying its own standards as to whether they're going to indict AIG people as opposed to the Southern District of New York," he said.

Litt, a prominent white-collar defense attorney, has been identified in media reports as a Obama campaign activist. He declined to discuss any role he has had with the campaign or transition, and said his comments reflected his own views.

He said he thought Obama's administration would show "a greater openness" to work with other countries on legal issues.

Litt said he expected the Obama White House to decide how to proceed with enforcing congressional subpoenas of Bush White House officials over the firings of U.S. Attorneys. The officials have refused to comply. "Personally I don't think you can blow off subpoenas," Litt said.

"Historically those sorts of issues get worked out by negotiation."

(Editing by Chris Wilson)