The speculation on Wall Street is that New York State Attorney General Eliot Spitzer is waiting for just the right complaint to trigger an investigation of the mortgage industry, according to Toronto's Globe and Mail.

Spitzer has led a crusade against Wall Street that started with investment firms that used tainted research to attract banking deals. Then he moved to mutual funds, one of the greatest stores of wealth in the United States. But it falls about $400 billion short of the mortgage industry, worth an estimated $7.4 trillion.

Wall Street insiders suggest that Spitzer may turn his attention to the mortgage industry because, like the mutual fund industry, it is full of trusting customers who can be tempting targets, and represents a lot of votes should Spitzer move into politics. Spitzer himself has given no indication that he plans to investigate the mortgage market, despite the talk on Wall Street.

An idea of what might lie ahead can be seen from the troubles of Fannie Mae and Freddie Mac, the two government-sponsored companies that guarantee most of America’s mortgages. Earlier this year, Freddie Mac was caught in an accounting error that resulted in a $4.5-billion earnings restatement. Fannie Mae reported a $1.3-billion mistake last month, after finding errors related to a derivatives accounting rule.

If Spitzer were to target the mortgage industry, observers suggest that fees might be one area of focus. The relationship between mortgage providers and real estate agents might be another. Do mortgage providers offer better terms if the prospective mortgage holder transfers other assets to the bank? Investigators also might look at whether mortgage rates are as low as they can be, given prevailing bond or Treasury rates, or whether there's too much lag time between falling interest rates and falling mortgage rates.