Authorities target mortgage fraud

Federal law enforcement agencies are planning a nationwide crackdown on suspected cases of mortgage fraud.

Operation Malicious Mortgage would be the third national effort by federal agencies, John D. Arterberry, executive deputy chief of the fraud section in the Justice Department’s criminal unit, said Thursday at a Mortgage Bankers Assn. conference.

The number of mortgage fraud cases being investigated has tripled over the last five years as soaring demand for loans led to lax underwriting standards, Arterberry said. More than 150 defendants were charged in the 2004 and 2005 operations, Arterberry said.

At the bankers’ conference, the Mortgage Asset Research Institute released a case report on mortgage fraud that named Florida the No. 1 state for the problem. Nevada was No. 2, followed by Michigan, California, Utah, Georgia, Virginia, Illinois, New York and Minnesota.

The institute creates a mortgage fraud index based on cases submitted to the group by subscribers, including lenders and insurers.