Police have arrested six men and a woman for allegedly conspiring to defraud five banks of $20 million in mortgages.

Investigations found that between November 2001 and May last year, the management of a property developer conspired with a number of 'purchasers' to fabricate a story that real estate had been sold to them, so as to obtain the mortgages.

However, no deposits were paid and the mortgages approved by the banks were the only monies transacted, rendering the information on the payment terms on the sale and purchase agreements fraudulent.

Four of the victimised banks said they would not have granted the mortgages if they knew the actual payment terms.

The arrested, aged 41 to 63, are still being detained for enquiries while investigations by the Commercial Crime Bureau continue.