The numbers came to light this week as mortgage lender Bradford & Bingley disclosed it had been forced to take a $33 million charge against earnings for the first six months of 2008 thanks to loans to criminal gangs and other perpetrators of fraud, The Times of London reported Saturday.

Experts told the newspaper that may only be the tip of the iceberg. Navigant, a financial consulting firm that conducts forensic investigations, estimates British mortgage lenders could be holding at least $12.7 billion in fraudulent loans. Industry experts say banks are alarmed that the true size of mortgage fraud is only now becoming apparent.

The Times said the British Financial Services Authority has banned at least 20 brokers and fined two of them $182,000.

"The effect of the mortgage crunch has been to make it less easy for people to get away with these things," said Philip Robinson, the FSA's director of financial crime and intelligence. "The forest (of credit) isn't so big, so the trees stand out."