The Justice Department announced the arrests of nearly 500 people in what it billed as a nationwide “takedown” of mortgage scams, many of them directed at homeowners in financial distress, the Wall Street Journal reports. Federal and state authorities in the past three months have seized or recovered for victims more than $200 million in a range of criminal and civil cases. Officials have identified losses of $2.3 billion stemming from hundreds of mortgage-fraud cases. “The breadth of the fraud is truly astonishing,” said Attorney General Eric Holder.
The Federal Bureau of Investigation said suspicious-activity reports of mortgage fraud referred to law enforcement by financial institutions rose by 5 percent in fiscal 2009 (http://www.fbi.gov/publications/fraud/mortgage_fraud09.htm). The FBI has devoted more resources to tackling the problem. The number of FBI investigations into alleged mortgage frauds more than doubled, to more than 3,000 this year from around 1,200 in fiscal year 2007. The Obama administration is under pressure to hold bankers and financial institutions accountable for actions that may have contributed to the deepest financial crisis since the Great Depression. In November, President Barack Obama set up the Financial Fraud Enforcement Task Force to coordinate federal, state and local efforts to prosecute financial misconduct.