The Chicago Tribune reported today that the Federal Bureau of Investigation has instructed more that two dozen field offices to cease financial crime investigations so agents can work on mortgage fraud probes.
That’s a marked change from recent years, when agents have been instructed to focus on homeland security issues, according to the Trib.
Twenty-six offices in areas where mortgage crime is prevalent were told to focus on mortgage issues last week by Kenneth Kaiser, chief of the criminal
The reason could be the number of suspicious activity reports filed in the 12 months ending Sept. 30–47,000, a 31 percent rise from 2007.
Because mortgage fraud can include everything from appraisal-inflating schemes to scams to "rescue" homeowners
facing foreclosure, it can affect real estate agents, builders, appraisers, attorneys and mortgage bankers, the Trib said.
As the foreclosure rate rises–RealtyTrac said today that foreclosure filings are 50 percent higher than in May 2007, the New York Times reports–rescue scams are likely to become more of a concern.
Still, the FBI switching its focus from homeland security to mortgage fraud investigations is big news.
It shows that the FBI has a reason to be concerned about fraud increasing as the market works to repair itself.
It shows that another area of government–in addition to lawmakers proposing housing bills and Comptroller of the Currency John C. Dugan, who this week questioned the accuracy of the subprime borrower assistance and foreclosure information that banks and mortgage firms are offering–are concerned about housing market regulation.
And it shows that, although the housing slump is hopefully winding down, it’s not over yet. But–with a new focus on mortgage fraud investigation–at least some of the corruption could be…