The FBI is investigating 2,800 cases of mortgage fraud, it was disclosed on the second day of hearings by the Financial Crisis Inquiry Commission in Washington. Regulators and government officials testified that failures of oversight and gaps in the regulatory framework allowed rampant mortgage fraud to develop in the middle of the last decade. "Many consumers have only a limited ability to understand details of standard mortgage contracts, let alone the complex mortgages that became common during this period," Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, told the bipartisan commission. "Unscrupulous mortgage providers capitalised on the widely advertised benefits associated with mortgage refinance, and took advantage of uninformed consumers."