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In addition to their falling profits and layoffs, people in the lending industry have to deal with federal investigators. The FBI says it has launched a probe into more than a dozen companies.
NPR's FBI correspondent Dina Temple-Raston reports.
DINA TEMPLE-RASTON: The FBI's Criminal Investigative Division wouldn't identify the 14 companies it is investigating, but it did say that the bureau was looking into allegations of fraud in virtually every stage of a mortgage, from the bundling of loans to the banks that end up holding them.
The bureau is even opening up books for firms that have been forced into bankruptcy as a result of the mortgage crisis. They are looking, among other things, for insider trading or other wrongdoing.
Sharon Ormsby heads up the FBI's financial crimes section. She says that more than half of their cases involve schemes worth more than a million dollars.
Ms. SHARON ORMSBY (FBI): They are criminal enterprise schemes involving brokers, appraisers, realtors, straw buyers, underwriters, developers, lawyers, and lenders, among others. It could be any combination of those groups.
TEMPLE-RASTON: As a result of this flood of activity, the FBI has opened more than 1,200 mortgage-related fraud cases. To give you an idea of scope, the number of suspicious activity reports banks have filed with the FBI have nearly doubled since 2006.
Neil Power is the chief of the FBI's Economic Crimes Unit in Washington. He said in 2003 there were 7,000 suspicious activity reports.
Mr. NEIL POWER (FBI): 2008, we're going to predict that we're going to have 60,000. They're still coming in. That would tell you that these suspicious activity reports are still come in the door. So we're going to have to take a hard look at these things.
TEMPLE-RASTON: The latest investigations are a new wrinkle in the FBI's focus on mortgage fraud. By focusing on the secondary market for mortgages, the FBI is casting a wider net, and that could end up implicating well-known financial firms. A number of adjustable rate mortgages will be resetting this year, so the FBI expects a flood of new cases.
Dina Temple-Raston, NPR News, Washington.