After months of finger pointing directed toward homeowners, banks, and lending institutions, the FBI has charged more than 400 real estate players with mortgage fraud. The investigation, called Operation Malicious Mortgage, began in March yet the U.S. Justice Department just announced the details on Thursday and 50 arrests were made in the past two days alone. Stories about predatory lending aren't new, but it's interesting to now see that the culprits include industry borrowers, loan originators and real estate agents.
Those arrested were responsible for approximately $1 billion in losses incurred by individual borrowers. According to The Wall Street Journal, "the most common type of mortgage fraud was misstatement of income or assets, followed by forged documents, inflated appraisals and misrepresentation of a buyer's intent to occupy a property as a primary residence."