WALL Street banks are among the 14 corporations under investigation by the Federal Bureau of Investigation for possible crimes relating to the subprime mortgage crisis.
The FBI will not identify the companies being investigated, but said the probe was industry-wide and included investment banks, developers, subprime lenders and companies that securitized loans.
The sub-prime crisis has already cost some of the biggest banks in the US in excess of $US130 billion ($147 billoin) in bad debt. Sub-prime loans were typically made to people with bad credit or low income who would typically not have qualified for traditional loans.
Neil Power, chief of the FBI's economic crimes unit told Bloomberg the criminal cases involved “valuation-type stuff.'' He said the probes include reviews of subprime lenders, housing developers and Wall Street banks that package loans as securities.
Mr Power also told reporters the criminal probes involved potential violations such as accounting fraud and insider trading. The FBI will look through the books of firms that have been forced into bankruptcy as a result of the mortgage crisis to look for instances of insider trading or other wrongdoing.
The FBI said cases involving individual loans had risen sharply after a crackdown on subprime lending irregularities.
"We anticipate in the next year that another wave of adjustable rate mortgages will reset and with that we anticipate that the mortgage corporate fraud potential cases to increase," said Sharon Ormsby, head of the FBI's financial crimes section.
The Securities and Exchange Commission has also opened about three dozen civil investigations into the subprime market collapse.
Some of the probes overlapped, an official said.
Targets of the SEC probe include Swiss bank UBS AG and US investment banks Morgan Stanley , Merrill Lynch , Bear Stearns , as well as bond insurer MBIA .
The SEC, which has formed an internal subprime mortgage task force, is looking at how financial firms priced mortgage-based securities and whether they should have told investors earlier about the declining value of those securities.
The US attorney in Brooklyn, New York and the FBI earlier launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns which collapsed in the middle of last year.
There are also state investigations.
The corporate investigations are part of an FBI crackdown on improper subprime lending, which also includes a focus on fraud in loan origination.
The agency had about 1200 active cases, up 40 per cent from 2006, with 321 criminal complaints or indictments, officials said.
"Subprime loans are decreasing but ... suspicions of mortgage fraud are increasing," Ms Ormsby said.
Some of the loan origination cases were spurred by individuals lying to qualify for mortgages, but about 80 per cent of the cases involved fraud for profit, Mr Power said.
Particular problem areas included California, Texas, Arizona, Florida, and the Midwest, officials said.