Indiana Attorney General Steve Carter is mounting a vigorous prosecution of real estate and mortgage fraud in the state, following a year in which his office brought disciplinary complaints against 170 appraisers.

There currently are 640 active investigations of real estate brokers and salespeople under way, according to figures provided this week by Carter's office.

"I would consider it a No. 1 priority in our state," said Tim Reed, chairman of the Indiana Real Estate Commission. "Anything dealing with those type of cases. Mortgage fraud, it's No. 1 at the attorney general's (office) right now."

Investigations and complaints by the attorney general's office against real estate professionals have soared since its "homeowner protection unit" opened for business in July 2005.

A trial run of the unit was authorized by the Indiana Homeowner Protection Act, passed by the Indiana General Assembly in 2004 in response to predatory lending in the state. Both houses have passed bills this year to make the unit permanent.

"We hope that more people will recognize that there is a place to turn for help if they believe they have been the victim of, or suspect, questionable business practices," Carter said.

In 2004, the attorney general's office brought 17 complaints against real estate professionals to licensing boards. Last year, it lodged complaints against 188.

Since the homeowner protection unit started work, 211 appraisers have faced discipline, according to the attorney general's office.

Consumer complaints are the basis of most of the attorney general's investigations. Those also have soared since 2005, with 605 coming into the attorney general's office in 2006 alone.

The second phase of the attorney general's crackdown comes as mortgage fraud investigations of so-called "sub-prime" lenders heat up nationally.

The attorney general's office would not comment on the direction of current investigations. But real estate professionals say the emphasis is now shifting to real estate brokers and salespeople, who must be licensed to do business in Indiana. Those people can facilitate mortgage fraud through a variety of schemes.

Many of the cases under investigation are land contract or so-called "rent-to-own" schemes, Reed said. People are often enticed into them when they are at risk of losing a home to foreclosure or facing bankruptcy.

"It's always a consumer issue," Reed said. "The consumer is being misled."

Licensing boards can take action ranging from requiring the real estate professional to attend classes to revoking his or her license. Criminal cases can be referred to local or federal prosecutors.

A preliminary review of case outcomes by the Indiana Real Estate Commission shows 88 direct actions against a real estate professional's license in the past two years. Those actions ranged from probation to revocation of the license.

Indiana long has had one of the highest home foreclosure rates in the nation, and still ranks in the top 10 nationally, according to RealityTrac, an online marketplace for home foreclosures.

Reed, who is also a Valparaiso Realtor, said the problems cropping up now and attracting so much attention nationally are the result of the big changes in home lending practices in the last decade.

No down payment, interest-only and other loan products have increased the risk and consequences of fraud.

"If you could fog a mirror, you could get a mortgage," Reed said.