- May 25, 2002
- Professional Status
- Certified Residential Appraiser
NEW YORK (MarketWatch) -- Besieged subprime lender Countrywide Financial Corp. is being investigated by the Federal Bureau of Investigation for possible securities fraud, according to a news report Saturday.
The Wall Street Journal report said the probe focuses on whether Countrywide's management misrepresented the quality of its mortgages in routine securities filings, which may have led investors to overvalue the loans it then securitized into more than $100 billion worth investment vehicles between 2004 and 2007.
Banks and lenders lost billions of dollars over bad bets on mortgage-backed securities and analysts estimate they will continue to stanch the bleeding well into 2008.
The FBI inquiry will also take a closer look at how common fraud was in Countrywide's origination process, the report quoted unnamed sources as saying. The agency is currently investigating more than a dozen subprime lenders about their origination and securitization processes and possible conflicts of interest between the lenders and Wall Street