BY BAILEY HARRIS

The Justice Department announced Thursday that hundreds of people have been arrested and charged with mortgage fraud in the last couple of months--many of them within the last few days.

Most of the arrests are the result of a multi-agency initiative known as 'Operation Malicious Mortgage.' The initiative, which ran from March 1 to June 18, was a federal effort to crack down on the mortgage fraud incidents that may have contributed to the U.S. housing crisis.

Individuals arrested in recent FBI sweeps include bankers, lenders, brokers, hedge fund managers and real estate appraisers. To date, 406 people have been charged in 144 mortgage case. Total borrower losses from these cases are estimated at $1 billion, according to the FBI.

Nineteen companies were probed, including investment banks, hedge funds and other organizations that may have engaged in questionable accounting practices or mortgage securities fraud.

Small crime rings and individual cases involving millions of dollars were the main focus of Operation Malicious Mortgage, but there is plenty of fraud that still needs to be investigated.

Fraud for profit and fraud for property (a.k.a. fraud for housing) were common during the housing boom. Industry professionals were primarily responsible for incidents of fraud for profit, while borrowers participated in fraud for property scams.

The FBI estimates that fraud for property/housing accounts for only 20 percent of all fraud. Victims in these cases tend to be banks and other mortgage lenders. Whether there will be a federal crackdown on this type of fraud is yet to be seen.

Top Ten Mortgage Fraud States

According to the FBI, the worst state for mortgage fraud in 2007 was California, followed closely by Florida and Georgia. The majority of the fraud--37 percent--occurred in the western U.S.