INDUSTRY NEWS
Mortgage Fraud Probe Prompts Arrest of 400 Real Estate Industry Members, According to Justice Department
June 20, 2008
Source:The Los Angeles Times
Washington, D.C.--The Justice Department said Thursday that since March, more than 400 real estate industry players--including brokers, lenders and appraisers--have been charged as part of a federal mortgage fraud probe dubbed "Operation Malicious Mortgage," the Los Angeles Times reports.
Mortgage fraud has cost homeowners and other borrowers more than $1 billion, according to the FBI; globally, it has cost $1 trillion in losses.
"Whether committed by unscrupulous lenders, real estate professionals or desperate homeowners, mortgage fraud affects all of us," Thomas P. O'Brien, the U.S. attorney in Los Angeles, told the Times. "Defaults on inflated loans and resulting foreclosures impose huge monetary and social costs, as well as making it more expensive for everyone to obtain credit."
The Operation Malicious Mortgage investigation centered on individuals and small crime rings, FBI officials said.
Speaking in Washington, D.C., FBI Director Robert S. Mueller III said the number of potential mortgage fraud cases that the bureau was looking into had doubled in the last three years.
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