Let's hope they're busy with more important things

The FBI's annual Financial Crimes Report to the Public has a few statistics on the bureau's efforts to combat mortgage fraud, and at first glance they sound impressive.

The bureau said it investigated 818 mortgage fraud cases in 2006, winning 204 convictions and collecting $389 million in restitution and $231 million in fines. That's up from 436 cases investigated in 2003.

But back in November, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) projected that mortgage lenders would file 28,372 mortgage-related suspicious activity reports (SARs) in 2006 -- a more than five-fold increase from the 5,387 SARs filed in 2002.

So it sounds like the bureau is stepping up its efforts but, because the problem is growing so fast, the percentage of cases they are able to take action on is actually dwindling. The numbers suggest the FBI has never been able to get at more than the tip of the iceberg. 

Is this a question of priorities, or is the bureau swamped by other, more pressing matters? I don't know. My attempts to get an interview with William Stern, the agent who heads up the bureau's efforts in this area, have gone nowhere in recent weeks. And there's not much to sink your teeth in the section on mortgage fraud in the 2006 Financial Crimes Report. If you compare it to the 2005 report, most of the language -- maybe 75 percent -- is generic boilerplate that's been recycled from last year. Several statistical charts referred to in the text are not available in either the HTML or PDF versions (guess they couldn't just copy the ones from last year).

Compare the FBI's cursory report to FinCEN's -- which includes a detailed analysis of the latest techniques used to perpetrate mortgage fraud -- and you have to wonder. Can't the FBI even be bothered to talk tough on mortgage fraud, whether or not they're able to walk the walk?

One possible upshot: since authorities are apparently only able to prosecute a fraction of the people committing these crimes, those who do get caught and convicted will be made examples of. Anecdotally, it seems like we've seen some LONG prison sentences handed out in some recent mortgage fraud cases. (mortgage loan officer Charles E. Hall Sr., 24 years; Richard B. Lucas, 14 years; mortgage broker and appraiser James Davis Bennett, 10 years; a former bank branch manager and his wife (both) 9 years; Promise Land Mortgage owner Romero Brice, 7 years).
--Matt Carter, Inman News

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