The reality of the mortgage industry (mortgages news), even after the implosion, is that it remains rife with fraud (fraud news). Yes, there was a crackdown, one that is continuing apace. But the fact remains that the industry is really easy to game. And there are a lot of people willing to do so.

While the most egregious violators are no doubt aware of what they are doing, there are many who assume that what they do is just fine. A good example is the recent case in Connecticut, where two real estate professionals were accused of engaging in short sales to flip the property to a buyer that they had already lined up. That's a no-no, but you would have to think it's going on everywhere. Some will plead ignorance of the law.

Federal officials aren't giving up the overall fight. Criminal charges against more than 1,200 people allegedly responsible for $2.3 billion in mortgage fraud were filed recently, part of a nationwide crackdown. Of the people charged in the effort, 336 already have been convicted and 206 have been sentenced. This dragnet ensnared the top offenders. The small-timers, however, will no doubt get away free and clear.

For more:
- here's some background from the LA Times

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