FBI Wades Into Subprime Mortgage Mess

The FBI is investigating 14 companies for accounting fraud relating to subprime mortgage loans, a bureau official confirmed Tuesday.

"There are some irregularities we are looking at… [this is] good old-fashioned greed," Neil Power, chief of the FBI's Economic Crimes Unit, told reporters.

FBI officials declined to name the companies facing scrutiny, citing the ongoing investigation.

Power indicated that some people knew about the subprime crisis well ahead of time.

The FBI's Criminal Investigative Division is internally working on a subprime mortgage fraud industry initiative. The investigations are labor-intensive for the bureau, as they involve following paper trails and reviewing documents.

The FBI, which only handles mortgage fraud cases involving more than $500,000, currently has 1,210 cases pending. The caseload has increased 50 percent in the last 12 months.

Relying on data from the Treasury Department's Financial Crimes Enforcement Network, FBI investigators review suspicious activity reports to see if a case is warranted.

The number of reports has also exploded in recent years. In 2003, the FBI received 7,000 reports. The bureau is expected to receive 60,000 in 2008.

In May 2007, the FBI released its most recent report on mortgage fraud, which found strong ties between the scams and loans resulting in default and foreclosure.

The report found that rising foreclosure rates opened a door to criminals, who would prey on homeowners looking to save their homes or exploit offers for home equity lines of credit to perpetrate the fraud.

-- This embed didnt make it to copy for story id = 4210595.
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
You Might Also Like...
See It, Share It
PHOTO:National Intelligence Director James Clapper
J. Scott Applewhite/AP Photo
PHOTO: Cartoons Come to Life
Baby Sister Baboons Play Peekaboo
ChinaFotoPress/Getty Images
PHOTO: Apple CEO Tim Cook shows off the new iPhone 6 and the Apple Watch during an Apple special event at the Flint Center for the Performing Arts, Sept. 9, 2014, in Cupertino, Calif.
Justin Sullivan/Getty Images