Countrywide Financial Now Under Criminal Probe

The F.B.I. and the Justice Department have opened a criminal inquiry into Countrywide Financial for securities fraud. The F.B.I. investigation will take a close look at how common fraud was in Countrywide's origination process.

Their management is suspected of misrepresenting the quality of its mortgages in routine securities filings, which would have caused investors to overvalue the loans that were used as securities worth more than $100 billion between 2004 and 2007.

This is part of a broader ongoing F.B.I. investigation involving many subprime lenders, loan officers, mortgage brokers, speculators, local and regional mortgage fraud rings, other housing professionals and Wall Street banks that packaged home loans into securities.

A class action lawsuit filed by a consortium of government pension funds has accused Countrywide of behavior similar to that reportedly being investigated by the F.B.I. That lawsuit claims the lender misled investors by falsely representing that Countrywide had strict and selective underwriting and loan origination practices, ample liquidity that would not be jeopardized by negative changes in the credit and housing markets, and a conservative approach that set it apart from other mortgage lenders.

If Countrywide is found to have misled investors, it could jeopardize the planned $4 billion acquisition of Countrywide by Bank of America.

Dennis Pease is a Real Estate Broker with RE/MAX Integrity in Eugene Oregon and lives on the beautiful and rugged Oregon Coast in Florence.

Toll Free: 877-269-1239
Real Estate Florence Oregon

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