Mortgage fraud inquiry nets hundreds
Government official says losses in the fraud cases total about $1 billion.
Current Mortgage Rates |
| Type | Overnight avgs |
|---|---|
 | |
| 30 yr fixed mtg | 6.00% |
| 15 yr fixed mtg | 5.64% |
| 30 yr fixed jumbo mtg | 7.54% |
| 5/1 ARM | 5.85% |
| 5/1 jumbo ARM | 6.13% |
| |
WASHINGTON (CNN) -- Hundreds of people across the country have been arrested by law enforcement officials targeting crooked mortgage brokers, real estate agents, and other industry officials, the head of the FBI and a top Justice Department official said Thursday.
FBI Director Robert Mueller and Deputy Attorney General Mark Filip announced the arrests the same day two former Bear Stearns hedge fund managers, Ralph Cioffi and Matthew Tannin, surrendered to the FBI. The men are expected to face federal charges that they intentionally misled investors in two funds that collapsed last summer under the weight of wrong-way bets on mortgage-backed securities.
More than 400 people have been charged in the mortgage fraud probe, of whom nearly 300 have been arrested, including 60 in a coordinated sweep Wednesday, the Justice Department said.
The losses in the mortgage fraud cases cost consumers more than $1 billion, Mueller said.
"We will, as appropriate, seek prison terms," Filip said. "It is a very, very serious matter."
"Operation Malicious Mortgage," the investigation by the FBI and Justice Department, began March 1, government officials said. It resulted in 144 fraud cases in which 406 defendants were charged.
The FBI is investigating about 1,400 more cases of potential fraud, Mueller said, calling it "a substantial number of investigations, unfortunately."
The agency has 42 mortgage fraud task forces in operation, employing 180 agents, Mueller said.
Many agencies were credited as contributing to the investigation, including the Internal Revenue Service, the Secret Service, the Department of Housing and Urban Development, immigration and customs agencies, postal inspectors and the Federal Deposit Insurance Corporation.
Most of the arrests came Wednesday, federal law enforcement officials said, in Miami, Houston, San Antonio, Baltimore, Chicago, and other cities.
Officials indicated the suspects were involved mostly in small-scale schemes.
CNN Justice Department producers Terry Freiden and Kevin Bohn contributed to this report. 
-
Do you twitter? Built a wiki lately? Maybe it's time you started. more -
Here are six of the main reasons - and what they really mean for the future of the Big 3 automakers. more -
After selling its secret sauce, then buying it back, a family business lays plans to go national. more -
Fortune writer Paul Sloan goes to rock camp to learn why people pay for a taste of music glory. more
-
To avoid another big spike in gas prices, raise the gas tax and let market forces go to work. more
