A national mortgage fraud alert system was activated in New Jersey on Tuesday, a state official said, in response to an investigation by the New York Attorney General’s office that led to arrests of the top executives of the mortgage company KB Home.KBS and the company that owns it, Countrywide, have been accused of rigging mortgages to artificially inflate home prices, creating a housing bubble that was then inflated by fraud.
The alert system has been in place in New England for about a month, said Robert G. Kollmer, the director of the New Jersey Division of Financial Services.
He said the alerts are aimed at helping the state’s lenders prevent fraud.
Kollmer said he is concerned that some borrowers may not be able to get the loans they need, but that he has no evidence of fraud.
“I am concerned that we may not know what happened in some instances,” he said.
“That is something that we need to look into.”
The state is taking the alerts as a sign of the severity of the fraud problem.
K-Brains, a New York company that provides mortgage loan technology to banks, has said it is cooperating with state investigators.
The FBI has opened an investigation into whether the executives of KB Home, the company Kollmers said he was aware of, were involved in any fraud.
State Treasurer Joseph DeMaria, a Republican, said in a statement Tuesday that the state is not going to stop making mortgage payments.
“This fraud will not stop,” DeMaria said.
Kellogg, a former chief executive of the K-Bransons, was indicted on federal securities fraud charges in December.
He has pleaded not guilty to the charges.
Kelsey Kreps, a spokeswoman for the New Mexico Attorney General, said she could not comment on pending investigations.