FBI to target mortgage fraud

[Robbien]

Source: Financial Times

The Federal Bureau of Investigation is preparing a nationwide crackdown on mortgage fraud, the latest in a series of efforts to curb lending practices that contributed to the housing meltdown, according to people familiar with the matter.

The FBI is preparing to arrest hundreds of people across the US as early as next week for offences including encouraging borrowers to falsify income on mortgage applications, misleading home owners about foreclosure rescue programmes, and inflating home appraisals, said two people with knowledge of the operation. An FBI spokesman declined to comment.

Since October 2008, the FBI has opened 23 local mortgage fraud task forces around the country with the purpose of curtailing the illegal misstatement, misrepresentation or omission of material facts on mortgage applications.

. . .

As of June 2009, suspicious mortgage-related activity for the year was on track to exceed 70,000 cases, a 10 per cent increase over 2008 levels, according to preliminary FBI estimates. Mortgage fraud-related losses totalled $1.4bn in 2008, an 83.4 per cent rise over the previous year.

. . .

The FBI is scheduled to release its 2009 mortgage report on June 17. In previous years a series of arrests have coincided with the report’s publication. In June 2008, the FBI, along with other agencies, arrested 400 people as part of “Operation Malicious Mortgage,” a comprehensive shutdown of illegal mortgage schemes. That sweep was a coordinated effort among multiple agencies, including the Internal Revenue Service, the Department of Housing and Urban Development and the Federal Deposit Insurance Corporation.

Read more: http://www.ft.com/cms/s/0/da70fbfa-74e0-11df-aed7-00144feabdc0.html

---

Only 400 people in 2008? The FBI must not have been trying awfully hard.

[Demeter]

1. FBI Was Pulled Off to Fight "Terra, terra terra"

Cheney ordered them himself, I expect.

I just woke from a dream that my bank had failed, as had all the banks in my city except one, and I was lugging cash around trying to find a place for it, and it was stolen...frankly, I'd rather have the insomnia.

[Robbien]

2. True. Note that there was no report of arrests in June 2009

This was supposed to be an annual thing but I guess the GOPers just decided to skip the whole thing in 2009.

Ha! about the dream Demeter. Appears WEE's Friday's bank closure reporting is leaving an awful indelible mark on your psyche.

[Demeter]

4. The FDIC Cease and Desist Order to the Condo's Bank Certainly Did

[Po_d Mainiac]

3. Old story in the blogosphere...finally reaching M$M n/t

[DeSwiss]

5. FBI, please note the position of the horse.....

...relative to the "barn door." Thank you.

[DirkGently]

6. Good to hear they're (back) at it, but . . .

the larger problem was / is more systemic than the handful of "bad apples" who will be prosecuted under this approach.

We need a new barrel.

[No Elephants]

7. Are they going after sellers of mortgage-backed derivatives and the companies that rated them, too?

Why am I thinking that they'll make an example of a few relativly small fry, publicize that, then move on?