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FBI saw signs of mortgage crisis in ‘04

Mortgage News > FBI saw signs of mortgage crisis in ‘04

Date: 08/27/2008

FBI officials saw trouble brewing in the mortgage industry back on '04, but insisted the Bureau could avert a crisis and avoid a situation as costly as the S&L crisis. The LA Times reported the FBI was concerned that "the booming mortgage business, fueled by low interest rates and soaring home values, was starting to attract shady operators and billions in losses were possible."

In September of 2004, FBI official Chris Swecker, who was in charge of criminal investigation in the Bereau, feared the market had "the potential to be an epidemic". Mr. Swecker went on to say quite reassuringly that the FBI could prevent such a problem by placing enough agents to investigate mortgage fraud.

The LA Times reported that in 2007, at the height of the mortgage boom, the FBI's mortgage fraud task force was reduced to around 100 agents. In the 80's and 90's, the FBI deployed about 1,000 agents on the banking fraud scene during the S&L bust.

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