Mortgage fraud arrests have begun showing up with great regularity on Long Island. Fourteen people were charged last week with stealing $58 million in a fraud ring that involved more than 100 homes. Another 14, in a separate case brought by the Nassau County district attorney, are facing trial in October.

And there are reports of arranged sales on the rise -- cases where a homeowner falsifies a sale, effectively forcing the bank to reduce the mortgage on a home. That may sound like justice for a home that's lost value, but it's illegal, and it unfairly spreads the loss to the bank's other customers.

Why all this fraud in the news? Well, it turns out that Long Island is a hotbed for such schemes. The U.S. Treasury Department's Financial Crimes Enforcement Network says that Nassau had the fifth-highest number of suspicious reports of mortgage fraud per capita, among counties nationwide, in the third quarter of last year.

It's fascinating how people can think of different ways to make a quick, illegal buck. The convenience store robbery just doesn't compare for intrigue -- where's the imagination?

White-collar crime often involves people who had legitimate skills but at some point recognized an opportunity to cash in. In the case brought by Nassau DA Kathleen Rice in March, accused ringleaders James R. Sweet and Dwayne Benjamin were paying acquaintances $10,000 to pose as home buyers, and telling them that they were going to fix up the home and "flip" it. They portrayed it as an investment partnership.

So, the phony buyer took out a mortgage some $30,000 to $40,000 over the sale price, Rice said. The ringleaders allegedly paid off the "buyer" and pocketed the difference. There was no longer a homeowner to make payments on the house, leaving the bank to foreclose.

You can see that when home prices are rising, banks wouldn't be as unnerved by this scheme. But their sense of injury is high today. "For it to be fraud, somebody has to be damaged in some way," says Abigail Margulies, chief of the Crimes Against Real Estate unit in Rice's office, which was formed in late 2008.

Sweet and Benjamin allegedly became more brazen, eventually having people impersonate both the buyer and the seller, and swindling the bank out of the entire loan amount -- six times in one six-month period.

That's a lot of greed. More sympathetic, but just as illegal, are the homeowners whose mortgages are higher than the value of the home -- so-called underwater loans. They intentionally default on the loan and convince the lender to take less than is owed in a "short sale." In reality, the homeowner has arranged beforehand to "sell" the home to a friend for a lower price, and then continue to live in it.

The homeowner is sticking it to the bank that wouldn't renegotiate the loan. You can see how someone could justify that in their mind: "Why am I paying $4,000 a month to live in this home, when if I sold it, the new buyer could pay $1,300?"

A sense of injury runs high, and people feel they no longer need to play by the rules. Some people just walk away from underwater homes.

We'll be reading about more cases soon, says Margulies. Fraud takes a while to recognize and document. The charges being brought now are for crimes that occurred four or five years ago -- back before the 2008 crash, when there were loosey-goosey mortgage application rules about documenting employment or income.

Apparently, making loans to people who couldn't afford them was only part of the problem that led to the crash. Those loose practices also schooled would-be defrauders in how to game the system.

First published in Newsday