At times it seems we simply don't listen to the very people we pay to warn us. I recently ran across this article detailing an FBI report that essentially told us exactly what the future held for the mortgage industry, yet no one did much to prevent it. What could have been done? Did the governement fail us, or did we fail ourselves? Excerpts from the story are below:

FBI warns of mortgage fraud "epidemic" Seeks to head off  "next S&L crisis"

CNN Washington Bureau Friday, September 17, 2004

WASHINGTON (CNN) -- Rampant fraud in the mortgage industry has increased so sharply that the FBI warned Friday of an "epidemic" of financial crimes which, if not curtailed, could become "the next S&L crisis."

Assistant FBI Director Chris Swecker said the booming mortgage market, fueled by low interest rates and soaring home values, has attracted unscrupulous professionals and criminal groups whose fraudulent activities could cause multibillion-dollar losses to financial institutions.

"It has the potential to be an epidemic," said Swecker, who heads the Criminal Division at FBI headquarters in Washington. "We think we can prevent a problem that could have as much impact as the S&L crisis," he said.

In one operation, six individuals were arrested Thursday in Charlotte, charged with bank fraud for their roles in a multimillion-dollar mortgage fraud, officials said. The two-year investigation found fraudulent loans that exposed financial institutions and mortgage companies to $130 million in potential losses, they said.

The number of open FBI mortgage fraud investigations has increased more than five-fold in the past three years, from 102 probes in 2001 to 533 as of June 30 this year, the FBI said. The potential losses are staggering, and many financial institutions are cooperating with investigators.

Officials noted mortgage industry sources have reported more than 12,000 cases of suspicious activity in the past nine months, three times the number reported in all of 2001.

States identified as the top 10 "hot spots" for mortgage fraud are Georgia, South Carolina, Florida, Michigan, Illinois, Missouri, California, Nevada, Utah and Colorado.      END

--------

I recall being told by a highschool teacher that we study history because history repeats itself, and in doing so, we may prevent repeating previous mistakes. In theory, that sounds great, but is that what we actually do? Do we learn from our mistakes, or does money blind us as a society?