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Countrywide reportedly under FBI investigation

by Mikasi | March 9, 2008 at 06:21 pm | 270 views | add comment

Put this in your "no real surprise
to anyone who pays attention" folder -

NEW YORK (CNNMoney.com) -- The FBI has launched an investigation into the lending practices of battered home lender Countrywide Financial Corp. according to a U.S. government official, CNN has learned. The mortgage company is suspected of fraud, the official said, which may have contributed to the subprime mortgage crisis that has rocked the U.S. economy.

CNN writes that the story was first
broken in Saturday's Wall Street Journal.

As my computer is currently fritzing, I have to drop in the rest of the worthwhile quotes manually.

Though the Federal Bureau of Investigation has acknowledged ongoing
investigations related to the subprime debacle, neither the FBI nor the
Justice Department would comment on the specific targets.

"The FBI has been investigating potential fraud in the
mortgage/sub-prime lending industry, however, we can not confirm or
deny which companies are under investigation," said FBI spokesman
Richard Kolko.

On Friday Countrywide's founder and CEO, Angelo Mozilo, testified
before the House Committee on Government and Oversight Reform, along
with two other CEOs who resigned in the wake of the mortgage crisis --
Charles Prince of Citigroup (C, Fortune 500), and Stanley O'Neal of Merrill Lynch (MER, Fortune 500). All three defended their lofty compensation packages, despite the loss of billions to their companies and shareholders.

Let me give kudos to Now Public member chhoffannstahl for writing two stories on this subject that were worth reading in the first place, but in light of this CNNMoney.com story seem a bit prophetic.

Ciao.