They're glad to have a new mortgage fraud statute to fight it, but warn that the only really effective deterrents to these crimes are those that potential victims erect themselves.

Pete Dustin, a retired Las Vegas officer who returned to the Metropolitan Police force a decade ago to work financial crimes exclusively, explained how fraud proliferated in the housing market.

"About six years ago when the market was getting ready to take off, a number of organizations began holding seminars to teach people how to make money in real estate." Some of those students may have become multimilionaires, but more became investors who knew just enough to get into trouble.

"One thing the scammers would do is say to a prospective investor, 'This house is really worth $300,000, but equity is building so fast it'll soon be worth $500,000. So we won't borrow $300,000, we'll borrow $400,000, and I will take the $100,000 and split it and I'll be your property manager.

"So he puts a renter in the house and charges $1,500 to $2,000 rent. The payment would cover the rent, but the 'manager' collecting the rent doesn't use any of it to make the mortgage payments. ... You're still responsible for the mortgage payments. But you've signed a quit-claim deed giving control of your property to this other company, and the only way out of this trap is to tell the mortgage company to foreclose. Meanwhile, the people who got you into this have walked with about $100,000 you are responsible for paying back. Only you thought this was such a good deal that you bought 10 houses, and they've walked with $1 million."

That scam is called the advance equity fraud, and variations of it are still going on despite the foreclosure epidemic.

One increasingly popular scheme is aimed at investors or homeowners saddled with backbreaking payments. "Somebody says he'll buy you out, but you have to pay him a fee. And meanwhile, you're still listed as owner because he didn't record the documents." The new "owner" doesn't pay the mortgage he assumed; the mortgage lender eventually forecloses, hoping to sell the house for enough to cover the money still owed on the mortgage. Just in case the auction produces enough money to also pay some of the first owner's equity, the phantom buyer will steal that money also, by filing false liens against the property.

The best way to protect yourself against these scams is to make sure your transactions go through a combined title and escrow company. "When somebody tells you 'We'll buy your house but you get some extra money and give it to us,' that's a warning," Dustin said.

Any proposed third-party disbursement should raise questions.

"Equity stripping" is the practice of intentionally getting a homeowner so far into debt that foreclosure is inevitable -- and with special cruelty, it's often disguised as a service which will help a homeowner avoid that very thing. A lender offers to pay off a delinquent loan, by providing a mortgage at a higher rate than the original one. The homeowner will probably be unable to pay off the second one either, and a mortgage or two later, will face foreclosure from the new lender. At each stage of the game, fees are charged until the homeowner has no equity left to be returned to him in the foreclosure sale. That scam and related ones are discussed in detail in reports available from the National Consumer Law Center, www.consumerlaw.org.

One of the most disturbing trends is the tendency of mortgage fraud to spill over into identity theft. One reason it's disturbing, said Lt. Bob Sebby, head of Metro's financial crimes section, is the amount of money involved. Many identity thefts involve losses of $5,000 to $10,000. But when somebody takes out a mortgage with a false identity, somebody else may lose $300,000 or more.

"And the groups doing these don't do just one," Detective Kim Thomas said. "We'll easily document $10 million in losses with just one group."

In late September Sebby's men were chasing a perpetrator who used the identity of a 9-year-old California girl to take out a second mortgage on the house where he apparently lived in Las Vegas.

He didn't own the house, but got the lender's money anyway. The crime wouldn't have been discovered any time soon except that the girl's parents tried to open a bank account in her name, which led the bank to run a credit check.

And the mortgage industry itself is leaking information that makes fraud easier. Thomas said, "We just served a search warrant last week, finding a couple of individuals in control of mortgage documents, at least 13 cases of them. Each file has the name of the applicant, address, full credit report, copies of checks."

Each file in the box, Thomas said, has the potential to produce multiple frauds, each with multiple victims including both the person whose identity is stolen and the lender who underwrites a mortgage for a phantom owner.

"We might have to notify as many as 400 people they're potential victims," he estimated.

While the source of that specific trove of boxes hasn't yet been revealed, Sebby said scamsters are trying to corrupt employees about to lose jobs in the mortgage industry.

"They'll say 'Bring out a box of records with you and I'll give you $500 for it.' But the mortgage companies better realize they are still legally responsible for those records, and they need to be conducting regular and routine inspections. Right now. Because if we find some of their records in the wrong hands, our first call is to the state mortgage lending division."

That division controls the licenses of mortgage businesses.

Joseph Waltuch, the new commissioner heading that division, said he intends to make full use of the state's new mortgage fraud law enacted by the 2007 Legislature. It makes mortgage fraud a class C felony punishable by one to 10 years in prison, and multiple mortgage fraud a class B felony with the potential of 20 years.

Waltuch noted that his own investigators focus on regulatory law and administrative punishments, and have no authority to press criminal charges. But they are allowed and are encouraged, he said, to refer potential cases to local law enforcement or the Nevada attorney general. And with authority to expand the division's investigative staff in January, he hopes to refer more.

Increased vigilance on the part of police and state regulators isn't enough, though, and Sebby stressed that the same is in order for private individuals. He repeated the advice he has offered before: No security password you have, for any purpose, should be your date of birth, your mother's maiden name, or part of your Social Security number. "If your phone company insists on using that, make them change it or get a new phone company."

"And you should run a credit report on yourself about three times a year, just as faithfully as going to the dentist," he added. You're entitled to a free one, once a year, by going to the federal trade commission's Web page, www.annualcreditreport.com, or calling toll-free (877) 322-8228. You can buy another one or two directly from the three principal credit agencies -- Equifax, Experian, and TransUnion, cheaper than you can usually get them from companies that make online offers to do it for you on a subscription basis. What you're looking for, in every report, is financial activity you didn't instigate.

And what you're trying to do is minimize the damage, Sebby said. "It's no longer a matter of whether it happens to you. It's now a matter of when and how bad."