Since the launch of a national mortgage fraud enforcement campaign on March 1, federal efforts led to 485 arrests nationwide, making it the largest-ever collective enforcement initiative against mortgage fraud. The effort, dubbed “operation stolen dreams,” is headed up by US Attorney General Eric Holder, Federal Bureau of Investigation (FBI) director Robert Mueller III and Housing and Urban Development – Office of Inspector General (HUD-OIG) Kenneth Donohue. The mortgage fraud crack-down has uncovered 1,215 criminal defendants nationwide — including 485 arrests — who are allegedly responsible for more than $2.3bn in losses. To date, the operation resulted in 191 civil enforcement actions resulting in the recovery of more than $147m: “The last several years have seen enormous and damaging developments in the mortgage and housing markets, and the government has stepped in to bolster unstable marketplaces and devastated communities,” said HUD-OIG’s Donohue in a statement. “From home buyers to lenders, mortgage fraud has had a resounding impact on the nation’s economy,” said the FBI’s Mueller. “Those who prey on the housing market should know that hundreds of FBI agents on task forces and their law enforcement partners are tracking down your schemes and you will be brought to justice.” The types of alleged mortgage fraud cases uncovered and investigated include builder bailout schemes, where builders establish relationships with unlicensed mortgage brokers to “sell” homes to straw buyers at inflated prices. Fraudulent schemes also involved “ghost loans” where straw buyers misleadingly obtain loans on properties that have multiple unrecorded liens without the other lender’s knowledge. Reverse mortgage schemes often prey upon elderly homeowners by profiting on  phantom equity. Other mortgage fraud cases involving loan modification sometimes lead to homeowners who think they are only refinancing to actually end up signing over their homes. As the breeds of mortgage fraud grow more exotic and damaging, federal investigations are also picking up. The number of mortgage fraud suspicious activity reports referred to law enforcement grew 5% during fiscal year 2009 to 67,190, according to the latest yearly mortgage fraud report from the FBI. Write to Diana Golobay.