The Federal Bureau of Investigation recently released its "Financial Crimes Report To the Public Fiscal Year 2007," (available here) which contained an extensive summary of the staggering increase in mortgage fraud prosecutions, investigations, and incident reports for the last government fiscal year (October 1, 2006 to September 31, 2007). Here are some highlights:

--The extensive securitization of mortgages that were the hallmark of the subprime lending era "has created opportunities for organized fraud groups" and "the sale of the mortgages [in the secondary market] in many cases conceal or distort the fraud, causing it not to be reported."

--Reports of potential mortgage fraud increased from 35,000 in 2006, to 46,000 in 2007, to an estimated 60,000 reports in 2008.

--80 percent of all reported fraud losses involve collaboration or collusion by mortgage industry insiders, and so the FBI focuses its resources on these cases rather than borrowers committing "fraud for housing."

--Pending mortgage fraud cases in the courts nearly doubled from 2005 to 2007

--The top 10 mortgage fraud states for 2007 were Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado, and Minnesota.

--The report also notes in the Insurance Fraud section, the increased incidents of distressed homeowners, property flippers, and/or real estate investors have resorted to arson to avoid foreclosure.