By Greg Wood
Business Correspondent, BBC News, Washington DC
The US Justice Department says the frauds have cost victims $1bn
A senior FBI officer has told the BBC that more arrests will be made as part of its probe into mortgage fraud and the credit crunch.
Section chief for Financial Crimes, Sharon Ormsby, said hundreds of arrests already made were just a "good start".
More than 400 US real estate brokers have been arrested and charged with fraud in the past few months.
And two former Bear Stearns executives have been charged over the collapse of two hedge funds.
They are the first executives to face criminal charges related to the collapse of the value sub-prime loans which triggered the credit crunch.
"It's a good start for us in our push to begin further investigations into corporate and mortgage related fraud" said Ms Ormsby, who is overseeing the FBI's Operation Malicious Mortgage.
We are looking at individuals related to mortgage lenders, investment firms, brokerage houses, hedge funds, due diligence firms, rating agencies - the whole gamut
Sharon Ormsby FBI
"We wanted to put forth a statement that we are serious about these frauds and that we understand that if we don't take action against them it will create further problems for our economic future."
She refused to say how many more arrests the FBI expects to make in one of its biggest financial investigations, involving 200 full-time agents and more than 30 task forces across the US.
Sharon Ormsby on tackling corporate and mortgage related frauds
But she confirmed that the Bureau was looking at every aspect of mortgage fraud, from the granting of individual loans to their bundling up and sale on Wall Street as investments.
"We've initiated investigations into 19 corporations. We are precluded from talking about them. But we are looking at individuals related to mortgage lenders, investment firms, brokerage houses, hedge funds, due diligence firms, rating agencies - the whole gamut."
Some of the leading investment banks on Wall Street and their senior executives are now thought to be in the frame over the collapse in the market for mortgage-backed securities which has left them with hundreds of billions of dollars in losses.
Ms Ormsby said the problem of mortgage fraud could be even bigger than expected and forecast that the FBI would be working on it for at least the next two years.
"I don't know that I ever put into consideration as to how extensive it is," she said.
If we can identify the victims we will do that but many times unfortunately very little money comes back to them
Sharon Ormsby FBI
"I think at this point we're looking at economic trends, intelligence collection and analysis to tell us exactly how large this could potentially be and we haven't determined that at this point."
She said that the FBI had been in contact with law enforcement agencies in other countries as part of its investigation into mortgage industry fraud, including the UK's Serious and Organised Crimes Agency, "but not about a particular corporation", she added.
The FBI estimates that homeowners in the US have lost more than $1bn because of mortgage fraud.
But Ms Ormsby held out little hope of compensation for the victims of the sub-prime collapse.
"A lot of times in these kind of cases the perpetrators will take the ill-gotten gains and purchase homes or cars or other material items," she said.
"They may no longer have them in their possession or they may have used them for their own lifestyle. By the time we conclude the investigation the best we can do is forfeit those items, and some of that money can be turned over back to the victims.
"If we can identify the victims we will do that but many times unfortunately very little money comes back to them. In the vast majority of cases there's not much hope of them getting compensation."
Some of cases involve the alleged use of false employment records or the inflation of property values.
Others are looking into alleged foreclosure rescue scams which target struggling homeowners offering to help prevent them losing their home for a fee.
Reports of mortgage fraud have increased significantly over the past year. According to the US Treasury Department, banks reported almost 53,000 cases of suspected mortgage fraud in 2007, up 37,000 a year earlier.
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