FBI Reports ‘Surge’ in Mortgage Fraud
(Editor’s note: Don’t miss MAR outside legal counsel Bob Kutner’s article on how fraud in the mortgage industry isn’t limited to predatory mortgage lending. Realtors® must be careful to avoid becoming tacitly involved in each type of fraud. Click here to read the story.)
The Associated Press recently reported that the FBI has seen a “tremendous surge” in mortgage fraud investigations that according to FBI Director Robert Mueller is diverting agents from other cases and is expected to keep growing.
At a Senate hearing, Mueller said the FBI is investigating an estimated 1,300 mortgage fraud cases – including 19 into sub-prime lending practices by U.S. financial institutions.
That’s up from three months ago, when FBI officials said they were investigating 14 companies for possible fraud or insider trading violations in connection with loans made to risky borrowers, and investments spun off of those loans.
According to the Associated Press, Mueller did not identify any of the companies under scrutiny. The Justice Department reportedly is looking into whether the nation’s largest mortgage lender, Countrywide Financial Corp., misrepresented its financial position and the quality of its mortgage loans.
Currently, 204 agents are investigating mortgage fraud cases out of an estimated 12,500 in the FBI.
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