I suggested a topic on the new Justice department arrests. "How about a topic on the new law enforcement actions this week?"

A reply, "You wonder how far it will go. It appears that millions of people lied on mortgage applications, and millions of brokers abetted this behavior. You wonder if it is a "go for the big fish" policy, or if they will start hauling in little fish to get them to flip."

One asked. "The articles I've seen seem to involve people doing something a little more brazen than just overstating their income on a mortgage application. My supposition would be that if a borrower who overstated his/her income is actually performing effectively on his/her mortgage, there won't be much scrutiny."

"In that way, maybe the whole business is designed to keep those who lied on their loan applications from walking away when they're underwater!"

Another posted, "I would like to see this topic - the Operation Malicious Mortgage program - discussed on here, too, and I'd especially like to see posters naming names. Six from the same company here in San Diego got busted yesterday. They were involved in several inflate-the-price to-get-a-larger-loan-amount deals in which the various parties split up the extra cash."

One sees another implication, "And part of this topic could be to explore how this new level of fraud exposure reflects on what some legislators/politicoes want to do with bailouts. More and more light shed on the fraud to the general populace will make those bailout/relief actions more and more suspect."

The Detroit News. "U.S. Attorney Stephen Murphy said at a news conference that since March, his office has charged or convicted 28 people with a variety of fraud and money laundering charges in 15 separate cases related to alleged mortgage fraud with losses exceeding $50 million."

"In Washington, the U.S. Justice Department and the FBI on Thursday announced 'a national takedown of mortgage fraud schemes,' saying 404 defendants around the country were charged in 144 cases since March 1. "

"Murphy denounced the criminals but called on the mortgage industry to 'clean up its act' and require more proof that borrowers can pay off loans. 'If there is money and an ability to get it, criminals will take advantage of it,' Murphy said."

"Victims include not only lenders and title insurance companies but homeowners such as Patti and Marc Cammarata."

"They say in 2002 and 2003, more than a dozen homes in their affluent northern Shelby Township neighborhood were purchased for well over the asking price by people who often didn't keep up their property and were rarely seen. Prices, which ranged from $500,000 to $600,000, spiked to $700,000 and up."

"Most are now in foreclosure; the unfinished landscaping and curtainless windows remain. 'There was a lack of neighborhood or community because you never knew who was living here,' Patti Cammarata said."

The Macomb Daily. "One case, which has already come close to a resolution, shows the seriousness of mortgage fraud penalties. Shannon Ferguson, 36, of Canton Township, pleaded guilty June 13 to one count of wire fraud for two fraudulent mortgage loans handled by Select Mortgage that were secured by a residence in St. Clair Shores. The loans totaled $732,000. Under the terms of her plea agreement, she faces up to 46 months in prison, a $1 million fine, and $732,000 in restitution."

"Co-defendants Tariq Hamad and Kalil Khalil pleaded guilty to broader mortgage fraud schemes encompassing loans totaling $21 million. Hamad was sentenced in September 2007 to 110 months in prison and ordered to pay $11.5 million in restitution. Khalil was sentenced in February 2008 to 60 months and ordered to pay $11.1 million in restitution.'

The Dallas News. "Federal agents arrested eight North Texas men Wednesday in connection with an alleged mortgage fraud operation involving at least 11 homes in the Dallas-Fort Worth area. In a 51-count indictment, the eight men and three other defendants stand accused of profiting by obtaining mortgages based on inflated sales prices."

"Prosecutors alleged that the defendants recruited straw buyers to purchase the homes, then let the loans go into foreclosure after making just a few payments."

"In one case from 2003, according to the indictment, Eric Farrington of Irving, a real estate investor, motivational speaker and convicted felon, and two associates recruited a straw buyer to purchase a home near the corner of Preston Road and Royal Lane for $630,000."

"It's unclear what the home's market value was at the time, but the Dallas Central Appraisal District had it on the books at less than $400,000."

The Palm Beach Post. "A local title agent and a chiropractor are among hundreds of alleged mortgage scammers captured nationwide in a federal crackdown on loan fraud announced Thursday. Evelyn Rivera, owner of Asset Title LLC of Wellington, and Wellington resident William Louisma, used bogus loan applications in an attempt to buy 55 units in a Fort Lauderdale condo."

"Rivera, Louisma and an unnamed mortgage broker and appraiser planned to borrow $11.9 million to buy the units at $216,000 apiece, then use phony appraisals and trumped-up loan applications to resell the units for $400,000 each, or a total of $22 million, according to federal court documents."

"Those named in the cases include housing developers, mortgage lenders and brokers, lawyers, real estate agents and appraisers, said Sharon Ormsby, section chief in charge of financial crimes for the FBI."

"'In many instances the fraud cannot occur without the title agent going along and collecting a fee,' said Alexander Acosta, U.S. attorney for the Southern District of Florida."

The Salt Lake Tribune. "State Rep. Paul Ray, who has worked in recent years to pass legislation aimed at reducing mortgage fraud in Utah, applauded the agency's decision to announce the hundreds of cases at once. 'The only way to send a message to the public that there's a chance you're going to get caught is to throw 400 indictments out there at one time,' Ray said."

"Authorities say Utahn Jerry C. Huff of Hurricane, lied to convince a bank to provide him with a $250,000 second mortgage on his home in Moab, a loan on which he has failed to make payments."

"According to the indictment, Huff lied about the condition and value of his home, overstated his income and submitted false documents, such as a fake appraisal, so that his loan would be approved. The indictment also says Huff submitted copies of personal tax forms as part of his loan application when in reality he hadn't filed tax returns for those years."

"Huff faces one count of wire fraud, which carries a maximum penalty of up to 20 years in federal prison; two counts of money laundering, with a potential maximum penalty of 10 years in prison for each count; and two counts of failure to file a tax return, which carries a maximum penalty of one year in prison for each count."

"The most common type of mortgage fraud was inflating income or assets to qualify for a loan, followed by forging documents, inflating appraisals and misrepresenting a buyer's intent to occupy a property as a primary residence. Loans based on primary residences are looked at more favorably by lenders."

The Sacramento Bee. "The region's latest arrest came Monday, when authorities charged Melissa Villegas, 29, of Natomas with lying to federal agents. Authorities alleged that Villegas lied during an investigation into transactions that included paying money to a buyer suspected of defrauding a mortgage company."

"'She is part of a larger investigation,' said First Assistant U.S. Attorney Larry Brown of the Eastern District of California office in Sacramento. 'We have numerous open pending investigations. In weeks and months to come that number will continue to rise.'"

"Other Northern Californians in Solano County, Stockton, San Ramon and Dublin have been charged, indicted and sentenced for mortgage fraud. Brown said the U.S. attorney's office for the Eastern District of California, which oversees investigations in 34 inland counties from Bakersfield to the Oregon border, has seen a 'significant uptick in referrals of mortgage fraud over the past 12 to 18 months.'"

The Union Tribune. "In San Diego, prosecutors have charged six people associated with downtown mortgage broker and real estate firm Creative Financial Solutions. The FBI analyzed 21 loans that CFS made from November 2005 to August 2006 and found that 18 of them have resulted in foreclosure or are in the process of foreclosur"

"CFS allegedly used methods common in fraud schemes during the housing boom, when lax lending standards and ever-escalating prices made the climate particularly friendly for potential schemes."

"In one case, a condo in Park Loft downtown was listed for sale in May 2006 for $845,000 to $925,000. Later, the price was raised, and it sold for $1.1 million. The buyer got a $1.1 million loan. CFS handled the loan and represented the buyer. The seller paid $174,000 to two CFS agents."

"Loan documents submitted by CFS said the buyer made $301,000 a year working for a company that prosecutors said 'does not exist as a functioning entity.' The buyer says her identity was stolen."

"The lender foreclosed on the property in March 2007. It was purchased from the bank in February. The price: $591,000."

The Honolulu Advertiser. "Lax lending standards and the high cost of housing caused an increase in mortgage fraud in Hawai'i during the past few years, outpacing the majority of Mainland markets dealing with similar schemes, according to the FBI."

"'Greedy people looking to make an easy buck found Hawai'i's hot housing market to be a lucrative place to operate their scams,' said Janet L. Kamerman, special agent in charge of the FBI's Honolulu division. 'The mortgage fraud schemes we have thus far identified in Hawai'i are as diverse as the individuals and groups running them.'"

"The 'fraudulent activities' of more than a dozen local mortgage brokerages are under investigation by the FBI and officials estimate losses from the schemes stretch into the millions of dollars."

"'This is one of those silent crimes that is so devastating to our community and so damaging to those families who are thrown out in the street,' said Ed Kubo, U.S. attorney for the district of Hawai'i. 'These are tough times. In this economy when we are seeing people losing their homes and losing their jobs, these types of crooks need to be called on the carpet and accounted for.'"

"To people who have committed fraud or are contemplating doing so, FBI Director Robert S. Mueller III said, 'We will find you, you will be investigated and you will be prosecuted.'"

"'The FBI will continue to direct investigative and analytic resources towards mortgage fraud and corporate securities fraud that threaten our nation's economy,' Mueller said in a news release."

"Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network."

From Bloomberg. "The risks of putting sensitive information in e-mails were disregarded by two ex-Bear Stearns Cos. hedge fund managers indicted for fraud who allegedly exchanged incriminating messages, former prosecutors said."

"Ralph Cioffi, 52, and Matthew Tannin, 46, were charged June 19 with misleading investors by saying two funds were thriving while knowing subprime-mortgage investments threatened their collapse. Investors in the funds lost $1.6 billion."

"The men were each charged in federal court in Brooklyn, New York, with conspiracy, securities fraud and wire fraud. Cioffi was also charged with insider trading. They face as long as 20 years in prison if convicted on the most serious counts. Both men denied the charges and vowed to win at trial."

"The indictments brought to light e-mail conversations that allegedly took place between the two men and others about the health of the funds, including a March 15, 2007, message from Cioffi to a team economist with the subject line 'Fear.'"

"'As we discussed it may not be a meltdown for the general economy but in our world it will be,' the indictment quotes Cioffi as writing. 'Wall Street will be hammered with lawsuits. Dealers will lose millions and the CDO business will not be the same for years.'"

"Cioffi acknowledged in a private e-mail that certain types of CDOs, which included subprime debt rated AAA or AA, were 'not really AAA' because they were subject to heightened risk of defaults, according to the indictment."

"In March 2007, Cioffi urged a Bear Stearns broker to put more money in the funds, telling him it was an 'awesome opportunity,' according to the indictment. The broker agreed, said Tannin, who later that month bragged in an e-mail that he had successfully lured more money into the funds, prosecutors alleged."

"'Believe it or not -- I've been able to convince people to add more money,' Tannin said in an e-mail, according to the indictment."