Fbi failing on mortgage fraud?
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At a Senate hearing, FBI Director Robert Mueller said the FBI is investigating an estimated 1,300 mortgage fraud cases — including 19 into sub-prime lending practices by
That's up from three months ago, when FBI officials said they were investigating 14 companies for possible fraud or insider trading violations in connection with loans made to risky borrowers, and investments spun off of those loans.
Mueller told the Senate: "We've had a tremendous surge in cases related to the sub-prime mortgage debacle, and we expect them to grow even further. I'm not sure at this point we can see the extent of the surge.
“The growing number of cases has forced the FBI to shift agents from other areas, such as health care fraud and other financial crimes, to focus on mortgage lending practices.
Collapse of confidence?
Mueller did not identify any of the companies under scrutiny. The Justice Department reportedly is looking into whether the nation's largest mortgage lender, Countrywide Financial Corp., misrepresented its financial position and the quality of its mortgage loans.
Congress is considering legislation to help half a million or more struggling homeowners get into lower-cost mortgages amid a darkening economic outlook that seems to be sinking into a recession.
At the hearing, Senator Barbara Mikulski warned that the economy could take another hit if there is a "collapse of confidence" in lenders: "We need to not only help the American people with their foreclosures, but we have to make sure that we maintain confidence in the financial institutions.
“If we have a collapse of confidence, this could have even far more draconian effects on the economy."