Mortgage industry sweep: 400 real estate industry players arrested

The U.S. Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) have been working together and have now finished their third major sweep of the mortgage industry in four years. On Thursday we were told that there had been arrests of more than 400 real estate industry players since March, and dozens of them had been made over the past few days. The recent arrests were for incidences of mortgage fraud; these had contributed to the housing crisis.

These arrests were announced at a Thursday afternoon Justice Department press conference which was conducted by Deputy Attorney General Mark R. Filip and FBI Director Robert Mueller. Filip had told those at the press conference that the arrests took place in Chicago, Atlanta, Miami, and suburban Maryland, as well as a number of other locations. Those who had been arrested included a number of people in the mortgage industry, from loan originators, industry borrowers, real estate agents.

The sweep had the code name of Operation Malicious Mortgage, as we mentioned above was the third major action that had been taken by the Department of Justice, this has now been going on since 2004. Since March 1, there have now been 144 mortgage fraud cases out of which 406 defendants were charged. The FBI estimates that there is approximately $1 billion in losses, which was the result of mortgage fraud schemes employed in these cases. There are three distinct types of mortgage fraud; these are mortgage-related bankruptcy schemes, foreclosure rescue scams and finally lending fraud.

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