F.B.I. Launches Fraud-Related Mortgage Company Inquiry
- Jan 30, 2008
Washington, D.C.–The Federal Bureau of Investigation has opened criminal inquiries into 14 companies in connection with a mortgage industry investigation, the Wall Street Journal reports.Although the F.B.I. did not identify the companies under investigation, it said the investigation, which began last spring, includes potential accounting fraud, insider trading and other violations that originated with loans made to subprime borrowers. The inquiry includes mortgage lenders, loan brokers and Wall Street banks that wrapped home loans with securities in sales. The F.B.I. is working with the Securities and Exchange Commission, which is conducting roughly three dozen civil investigations involving how subprime loans were issued and packaged and how the securities that supported them were assessed. The F.B.I. did not identify a date when charges may be filed.Mortgage fraud concern is on the rise, according to F.B.I. figures. In 2006, the bureau documented 35,600 reports involving mortgage fraud, an increase from 22,000 in 2005. In 2003, the F.B.I. processed only 7,000 reports.In the past, many of the cases the F.B.I. handled involved regional mortgage fraud scams that included speculators, loan officers and brokers.