The FBI has decided this financial crisis is not just a passing fad. Too bad that its newfound ardor comes well after most mortgage and housing frauds were likely perpetrated. Nevertheless, the numbers from Judiciary Committee testimony today are worth a scan:
The FBI has experienced and continues to experience an exponential rise in mortgage fraud investigations. The number of open FBI mortgage fraud investigations has risen from 881 in FY 2006 to more than 1,600 in FY 2008. In addition, the FBI has more than 530 open corporate fraud investigations, including 38 corporate fraud and financial institution matters directly related to the current financial crisis.
Source: Testimony (02/10/09) of John Pistole, Deputy Director, FBI
And another snippet:
Whether measured by Suspicious Activity Report (SAR) data, or by the rapid expansion of the FBI’s nationwide inventory of mortgage fraud cases, fraud has infected a significant segment of mortgage lending over the past five or more years. During that period, for example, the FBI’s inventory of mortgage fraud cases has more than tripled, and SARs of mortgage fraud have increased almost four-fold.
…According to the Wall Street Journal, more than 50 percent of sub-prime mortgages made in this country in 2005 were made by institutions that do not currently fall under the bank fraud criminal statute.
Source: Testimony (02/10/09) of Rita Glavin, Acting Assistant Attorney General, US DOJ