As the number of foreclosures in the metropolitan area continue to skyrocket, the region has become a key battleground for the FBI’s fight against mortgage fraud, federal officials said Thursday.
As the subprime mortgage crisis has spread from Wall Street to Main Street, sending thousands of homeowners toward foreclosure, legions of scammers have followed in its wake, FBI Director Robert Mueller III said Thursday.
Since 2005, the number of mortgage fraud schemes being investigated by the FBI has doubled from 721 to 1,416 as of May. And since March 1, the FBI has sent to court 144 mortgage fraud cases, many targeting the country’s most financially vulnerable whose homes were heading to foreclosure.
Operation Malicious Mortgage has charged 400 alleged fraudsters who the FBI believes inflicted roughly $1 billion in damage nationwide.
In the Greater D.C. area, since March 1 prosecutors have identified about $70 million that has been taken from local victims, and federal officials listed the region as an “emerging problematic mortgage fraud area,” in part because of the rapid rise in foreclosures.
A report released Thursday showed that the number of foreclosures per 10,000 homes in the region jumped from 23 to 131, while the national average went from 58 to 87, sending the area into the top tier of regions stuck in foreclosure crisis.
The fraud in recent years has followed trends that increasingly include “foreclosure rescues and reverse mortgages,” said Deputy Attorney General Mark Filip.
“The FBI will continue to direct investigative and analytic resources toward mortgage fraud and corporate securities fraud that threaten our nation’s economy,” Mueller said.
Mueller added that the FBI consolidated the recent spate of indictments as a “deterring factor,” sending the message to all fraudsters that “we will investigate you, we will prosecute you, and you can expect to see additional time in prison.”
