HONOLULU (KHNL) - A federal investigation results in more than 400 arrests nationwide, including on the islands.
The arrests are part of 'Operation Malicious Mortgage', a three-month-long sting on real estate scams.
In Hawaii, federal agents say the economic loss is in the millions due to mortgage fraud, a loss that has cost some victims their homes.
It's a crime that threatens the state's housing and credit industries. More than a dozen local mortgage brokers and 80 professionals, all under investigation for fraud, according to the FBI in Honolulu.
"People losing their homes, people losing their job, these are tough times. These types of situations hits our families even harder and so even moreso, we need to make a statement that these types of crooks are going to be called on the carpet and be accounted for," said U.S. Attorney Ed Kubo.
The most recent case? Five people indicted on May 15, including John Mendoza, President of Grace International Corporation, Ira Altwegg, a loan processor with Mortgage Alliance, and Antonio Alcantara, owner of Mortgage Ability.
"They have been charged with mail fraud, wire fraud, and making false statements on loan applications," said Kubo.
The FBI says the suspect's alleged scam involved two homes, one in Kaimuki, the other in Kailua.
"You have law-abiding citizens looking to get legitimate loans and now it is much much more difficult to get because some of this fraudulent activity," said FBI Special Agent in Charge, Janet Kamerman.
One common scam is called Identity Theft Scheme. A broker takes a client's information and submits two loan applications, one is legitimate, and the other?
"They get a second loan and with that second house, has done a number of things. He's flipped it and made money and this person never knows that it happened," said FBI Special Agent Brandon Simpson.
Mortgage scams fall in several categories, executed in a variety of ways. The FBI says all are preventable.
To avoid becoming a victim of mortgage fraud, the FBI offers these tips:
Do background checks, get recommendations from friends and family to make sure you're working with credible industry professionals, don't sign blank mortgage loan application documents, never put false information on a loan application, don't let anyone use your credit information to get a loan, never borrow more money than you can afford, and check your credit report every year.