According to the Wall Street Journal, the FBI has just opened inquiries into 14 unnamed lending firms. They are being investigated for reasons ranging from insider trading to accounting fraud.
“[This probe] adds to the increasingly long list of probes focused on this area, which also include the Securities and Exchange Commission, the New York State Attorney General, and others.
FBI officials say the bureau has 1,200 mortgage fraud cases under investigation and that they believe many more cases are in the offing, based on the number of so-called suspicious activity reports filed by banks. The number of SARs documented by the FBI has rocketed from 35,000 in 2006, to 48,000 in 2007, and are projected to reach 60,000 in 2008.” -Evan Perez, Wall Street Journal
I predict this is just the start of a bigger wave that is coming. Although publicity of the probes puts further tarnish on the lending profession, it will be shaking the bad apples from the trees and that will be good for the stand up lenders.
January 29, 2008 at 9:58 pm
With all of the mortgage companies and lenders going out of business, I have to wonder how many of them are properly disposing of documents. I doubt many of them are paying for expensive shredding services. Many are probably filling the dumpsters with files containing sensitive information. Mortgage companies have nearly all of a consumer’s personal information, so it’s really scary. Of the 9.9 million Americans who were victims of identity theft last year, I bet a lot of those became victims because of lazy mortgage brokers who were incompetent or selfish in the disposal of mortgage documents. I hope that the FBI starts rounding up those people.