The arrests were made this morning as part of an ongoing investigation into mortgage fraud that is alleged to have taken place between 2005 and 2007.
It is believed to involve more than 500 properties in the South of England.
More than fifty officers from the City’s Economic Crime Department, alongside officers from Sussex police, carried out the arrests.
Arrests were made at six residential addresses in Sussex and North London and searches also took place at three business premises.
The inquiry concerns East Sussex-based brokerage Eastbourne Financial Services, which is currently in liquidation and no longer authorised by the Financial Services Authority.
The FSA first alerted the City of London Police to the suspected fraud and has been closely involved in the investigation.
Eight men and one woman have been arrested on suspicion of conspiracy to defraud and money laundering.
Bob Wishart, detective superintendent at the City of London Police, says: “The scale of today’s operation shows City of London Police’s commitment to investigate frauds and bring those behind them to justice.
“We know that fraud has the potential to impact on local communities and we are determined not only to work with colleagues across the UK to investigate such frauds but to liaise with other agencies to mitigate that impact on innocent people affected by the criminal greed of others.”
Mortgage fraud cases grew by almost ten-fold last year with 25 cases worth £36m, data from KPMG revealed last month.
Brian Dilley, partner at KPMG Forensic, says more incidents of mortgage fraud are to be expected.
He says: “As house prices continue to fall, there will be more and more of these cases surfacing.
“Lenders are now proactively looking at their loan books to identify indicators of such frauds.
“Mortgage frauds by both organised syndicates and individuals are going to become more visible the longer the current constrained market conditions persist.”