As the mortgage foreclosure rate has soared across the country, so has mortgage fraud.

Anthony Russo, the supervisory senior resident agent for Augusta's FBI office, said not only has the number of mortgage fraud investigations increased but so have the dollar amounts of the scams.

The FBI has 1,416 open mortgage fraud investigations across the country, Agent Russo said. In half, the losses top $1 million, he said.

In comparison, five years ago, the FBI had only 400 mortgage fraud investigations, he said.

On Friday, the Mortgage Bankers Association reported that the number of U.S. homeowners in danger of foreclosure rose to a record high in the second quarter of 2008. According to the association, more than 4 million homeowners, 9 percent of all mortgage holders, were behind on their payments or in foreclosure at the end of June.

The rate of foreclosure proceedings also increased again. Almost half a million homeowners were in foreclosure in the second quarter of the year, the association said.

The rise in foreclosures is bringing out criminals, Agent Russo said. The FBI has 160 agents assigned full time to mortgage fraud cases.

One of the scams investigators see most often is called foreclosure rescue, Agent Russo said.

In this scam, a person convinces a homeowner facing foreclosure that the home can be saved by signing over the title. Once the scam artist has the title, he can take out a line of credit for himself.

It's possible such a promise could be legitimate, but it's doubtful, Agent Russo said.

In another scam, someone gets a homeowner desperate to sell his home to give the bottom price he will accept. Then, with the help of a fraudulent appraisal, the person sells the home for an inflated price, keeping the difference.

The homeowner and the buyer might never know, Agent Russo said, but if the buyer defaults and the mortgage lender forecloses, the lender cannot recoup the value of the loan because the property is not worth the value of the mortgage.

Another variation is a straw purchase. Someone obtains a mortgage using false identification with the intent of defaulting on the loan. Once the property is sold on the courthouse steps, the criminal can buy the property from the lender at a reduced price.

Another scam is driven by a crooked home builder who offers to sell a house at an inflated price and waive the down payment. The mortgage lender is cheated into believing, for example, that it is making a $200,000 loan for a $240,000 house, Agent Russo said. The lender is misled into believing there is $40,000 equity.

There's also what's called flipping, which is done with the aid of a fraudulently inflated appraisal. A property is bought and quickly sold at a higher price without any substantial improvement to the property, Agent Russo said.

The biggest scam right now is in mortgage rescue, he said.

People need to be cautious not to get drawn into a mortgage fraud scheme because those who enable others to carry out scams are considered just as guilty, Agent Russo said.

Several people have been prosecuted for mortgage fraud in Augusta, including attorney William O. Key Jr., who is serving a 14-month prison sentence. Agent Russo declined to say how many mortgage fraud cases are being investigated by the local office.

TAKEOVER LOOMS FOR MORTGAGE GIANTS WASHINGTON --- A historic takeover of Fannie Mae and Freddie Mac, which hold or back half of the nation's mortgage debt, could come this weekend. A government bailout could cost taxpayers around $25 billion, according to the Congressional Budget Office. Regulators are working on a plan to put the companies into a conservatorship and remove their CEOs, according to Rep. Barney Frank, D-Mass. The government is expected to control the companies at least a year as it evaluates and debates whether Fannie and Freddie should remain government-run entities or be restructured in some fashion, Mr. Frank said. -- Associated Press