Mortgage Investigations Skyrocket

FBI Chief: "Tremendous Surge" In Loan Probes Force Bureau To Divert Agents From Other Cases

(AP)  FBI Director Robert Mueller says a "tremendous surge" in mortgage fraud investigations has forced the Bureau to divert agents from other cases and is expected to keep growing.

At a Senate hearing on Wednesday, Mueller said the FBI is investigating an estimated 1,300 mortgage fraud cases - including 19 into sub-prime lending practices by U.S. financial institutions.

That's up from three months ago, when FBI officials said they were investigating 14 companies for possible fraud or insider trading violations in connection with loans made to risky borrowers, and investments spun off of those loans.

"We've had a tremendous surge in cases related to the sub-prime mortgage debacle," Mueller told a Senate Appropriations panel during a hearing on the FBI's $7.1 billion budget request for the 2009 fiscal year that begins Oct. 1. "We expect them to grow even further."

"I'm not sure at this point we can see the extent of the surge," he added.

Mueller did not identify any of the companies under scrutiny. The Justice Department reportedly is looking into whether the nation's largest mortgage lender, Countrywide Financial Corp., misrepresented its financial position and the quality of its mortgage loans.

Congress is considering legislation to help half a million or more struggling homeowners get into lower-cost mortgages amid a darkening economic outlook that seems to be sinking into a recession.

At Wednesday's hearing, Sen. Barbara Mikulski, D-Md., warned that the economy could take another hit if there is a "collapse of confidence" in lenders.

"We need to not only help the American people with their foreclosures, but we have to make sure that we maintain confidence in the financial institutions," Mikulski said. "If we have a collapse of confidence, this could have even far more draconian effects on the economy."

As part of the fraud inquiries, the FBI has seen an uptick in reverse mortgages cases, Mueller said. "That is something that we are seeing and may well need additional resources to address," he said.

Reverse mortgages are typically used to finance retirement or pay unexpected medical bills. They are becoming the escape route of choice for seniors caught in the tight straits of high-risk mortgages.

Some lawmakers fear the reverse mortgage industry is not immune from abusive sales practices preying on seniors, such as aggressive marketing and excessive fees.

Mueller said the growing number of cases has forced the FBI to shift agents from other areas, such as health care fraud and other financial crimes, to focus on mortgage lending practices.

Currently, 204 agents are investigating mortgage fraud cases out of an estimated 12,500 in the FBI.

[albrightw]

Please remember 1966 when charging interest, anything above 6% was against the law. It was said interest would drop dowm because of competitiveness, same thing happened to gas and electric "Holding Corporation, Constellation Energy" Why are the lower income people constantly being screwed? The rich get richer and the poor people population increases. is it necessary to continue to take our greed out on the poor people. There is going to an uprising,as the poor can only take so much.

[mcv57]

What a futile mission, and ....... I guess they are looking for court and lawyer funds from the scounrels in the mortgage industry.

Stupid news anyway, how about some real news CBS:

Oil surges as investors hunt an ''anti-dollar''

By Ambrose Evans-Pritchard
Last Updated: 12:56am BST 17/04/2008


Have your say Read comments

Oil prices have surged to almost $115 a barrel as China builds up stocks before the Olympics and hedge funds pour money into commodity futures as a way to exploit the collapse of the dollar.

[ianlou]

nrohena64
Not fully understanding the facts concerning this loan mess should not stop people from being allowed to angry about it.

You don''t need to be a doctor to sue a doctor.

The lenders knew what they were doing and they should have been able to predict the result.

Only an idiot will be surprised if the water tastes funny after pissing up river.

[cyberus-2009]

Sub-prime loan scandal = Savings and loan scandal.

In the end the gov''t will end up bailing out the big money people, a few mid-levels will be trotted out in a perp walk and the little people will end up screwed.

[nrohena]

Good afternoon
This is for those that speak ill about mortgage brokers, yes I can say some of these brokers are & can be unethical, but it all comes down to the lenders, they are the ones with boundries & the compliance issue''s, Mortgage brokers don''t put down the rules on who, what when & how, we just follow orders from the banks & lenders. It''s unfortunate that we have ppl. like you that like to spread dirt with out having the facts, if your not in the business and don''t know the regulations & where they come from, your the one that needs to be kicked in the butt for spreading information that is not true.

God Bless us all & hope we can all come out of this sink hole, because before it gets any better it''s gonna get worst. Lets focus on how to get out of the mess, not on how to make it worst.It nees to start from the top & work its self down the pole! Lets get ppl. out of the jams & start fresh with the real facts.

[naucoming4u]

Used car sales people simply "graduated" from lying and selling lemons that were cars...

...to lemons that are sub-prime loans.

The sub-prime loan scam made these used car sales-like mortgage brokers TONS OF MONEY, at the expense of the borrowers who did not understand all of the legal mumbo-jumbo on the stacks of loan documents. These unscrupulous sacks of ****** PURPOSELY did not fully explain the terms of the loans their customers signed, solely for the fact that they knew their customers would NEVER had agreed to such krappy loan terms!

Greed, yet again, has made itself apparent in this mortgage/home crisis. And now, we ALL ARE PAYING FOR IT!


See a soldier... thank him or her for their service to our country.

See a mortgage broker... kick him or her in the A$$ for ******* up our country!

[hankleikam]

I agree with the writer that wrot refi everyone now, By the time the gov. gets a plan together their will not be anything left to save. I am just tired of hearing about all the ideas and people I know are losing there homes. I am a realtor and see the crimes first hand, I have advised many people over the past few years not to get into the refi habit, homes will not always increase in value as they have been in the past.

[ov442]

If this Republican led federal government keeps giving corporations the opportunity to REmove all Risk from their business agendas, they will continue to do as they please and not suffer any consequences that deter from illegal practices.

the GOP is not "PRO-Business" they are - Pro Profits at any cost and by any means in a free for all with no oversight.-
All it ever does is hurt the poor and middle classes while usurping trillions for the rich.

[forthepeopl1]

please this is a simple thing to fix, why are you bending over for all of the wallstreet scum.
you have the right to do what this paulson/ben did for wallstreet,saying they had to to save america. so you can say the same thing, but this time you would be saveing america, and not wallstreet.
you must come out and stop the forcloseing of all these millions of homes, now,
ALL YOU HAVE TO DO IS MANDATE THAT ALL MORTGAGES THAT HAVE BEEN TAKEN OUT FROM 2000 TO 2007 BY ALL AMERICANS TO BE RE-FI A.S.A.P. NO EXCEPTIONS,


NO MATTER WHAT THE CREDIT IS, THEY WILL RE-FI EVERYONE AT JUST OVER PRIME, AND AT A RATE OF 40% OF WHAT IS OWED ON THE PROPERTY( PERSONAL HOMES ONLY)!!
WHY, BECAUSE MOST HOST ARE SELLING AT FORCLOSER FOR 20 TO 30 CENTS ON THE DOLLAR, SO AS TO WHAT PAULSON SAID TO BEARSTEARN 2 DOLLARS IS BETTER THAN NO DOLLARS SO TAKE THE DEAL..NOW REMEMBER ALL OF YOU, IF THIS COMPANY IN 6 MONTHS LOST 98% OF THEIR VALUE FROM 700 BILLION TO WHAT IS IT NOW. AND FOR SOMEONE TO COME IN AND BUY IT FOR NOTHING, WHAT IS THE REAL VALUE OF ALL THESE HOMES???NOBODY KNOWS, SO WHY NOT JUST START OVER??? AND STOP THE BLEEDING FOR ALL AMERICANS.

[e-mail]
DAVID A BELANGER
FOR COMMON SENSE THIS IS SO EASY TO FIX DONT MAKE IT HARDER THAN IT IS PEOPLE