FBI: Mortgage Fraud on the Rise

Federal Bureau of Investigations (FBI) Deputy Director John Pistole told a Senate Judiciary Committee on Wednesday that mortgage fraud investigations are intensifying in both volume and scope as the economic crisis worsens. The increase is so great, Pistole said, that FBI agents assigned to national security after the 9/11 attacks are shifting roles to assist with mortgage and financial fraud inquiries.
Pistole ""testified"":http://www.fbi.gov/congress/congress09/pistole021109.htm to lawmakers, ""The increasing mortgage fraud and financial institution failure case inventory is straining the FBI's limited … resources.""
The number of open FBI mortgage fraud investigations has risen from 881 in 2006 to 1,210 in 2007 and more than 1,600 in 2008. In addition, the FBI has more than 530 open corporate fraud investigations, including 38 corporate fraud and financial institution matters directly related to the current financial crisis.
Pistole remarked that mortgage and related financial fraud schemes ""have shaken the world’s confidence in the U.S. financial system"" and ""have adapted with the changing economy and now individuals are preyed upon even as they are about to lose their homes.""
Some of the current rising mortgage fraud trends that Pistole cited were equity skimming, property flipping, mortgage identity-related theft, and foreclosure rescue scams. Although there are many mortgage fraud schemes out there, the FBI said it is focusing its efforts on those perpetrated by industry insiders who are part of organized enterprises engaged in mortgage ""Fraud-for-Profit.""
Pistole said that although ""mortgage and related corporate fraud were not the sole sources of the current financial crisis ... it would be irresponsible to neglect mortgage fraud’s impact on the U.S. housing and financial markets.""
For Pistole's full testimony before the Senate Judiciary Committee, ""click here"":http://www.fbi.gov/congress/congress09/pistole021109.htm.