The FBI has opened an investigation into Countrywide for suspected securities fraud, reports the New York Times. The Justice Department and FBI “are looking at whether officials at Countrywide, the nation’s largest mortgage lender, misrepresented its financial condition and the soundness of its loans in security filings.” So far everything is unofficial because nobody has been authorized to discuss the case, and a Countrywide spokeswoman says, “”We are not aware of any such investigation.”
Countrywide is one of 14 companies being investigated over the past year by the FBI as it looks into how financial institutions packaged mortgages into securities.
The Times says it’s unclear what sort of charges might be filed, but that as part of the larger investigation against the group of companies the FBI “is looking into possible accounting fraud, insider trading or other violations in connection with loans made to borrowers with weak, or subprime, credit.”
“Countrywide Said to Be Subject of Federal Criminal Inquiry” [New York Times]