We've been having similar discussions recently as we add various kinds of loans to our AML monitoring software.
The thread that Ken referenced has some good info. You can't discount just flat out defaulting on a loan as a money laundering scenario. RLCarey's example of buying a CD for cash then borrowing against it is classic. (and the classics never go out of style.)
One of the investigators at my bank told a story about a couple getting a mortgage on a $600,000 home. The mortgage was for $150,000, and they claimed the sale of their existing home would cover the rest. However, their existing home was, coff, a 'park-model' home (and because I was dumb enough to ask, no, it wasn't even a double-wide
). The real source of funds turned out to be cash from an armored car robbery that, unaccountably, they'd been able to sit on for a few months before attempting to spend it.