Is the FBI Investigating Countrywide?
The latest news in terms of mortgage lenders is the current report circulating that the FBI is investigating Countrywide. Countrywide is the largest of home lenders in the US, and one of the biggest subprime lenders. Countrywide has been sustaining serious losses due to subprime writedowns and foreclosures. Since the subprime mortgage crash, Countrywide has lost billions of dollars. Indeed, in an effort to stem the flow, Countrywide has agreed to entertain an offer by Bank of America to purchase the ailing company.
And the FBI might be investigating Countrywide. CNN Money reports on the issues that the FBI might be looking into concerning this giant among mortgage lenders:
“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.
Even though Countrywide has not been officially and specifically named, the CNN cites a “government official” for the news that Countrywide is indeed one of the 16 companies under investigation for questionable mortgage lending practices.
And, apparently, this isn’t exactly news. The New York Times reports that the FBI has been stepping up mortgage fraud cases over the past few years:
For years, the F.B.I. has been warning that mortgage fraud is a significant and growing problem. In the 2006 fiscal year, it documented 35,600 reports of suspected mortgage fraud, up from 22,000 the year before and 7,000 in 2003.
Not that this is a really big surprise to many consumer advocates and others. However, the fact that mortgage fraud and other questionable mortgage lending practices are finally leading to the downfall of the US economy is shedding light on a problem that has been steadily growing in an era of cheap credit, corporate greed and unchecked consumer spending.
Tags: FBI investigating Countrywide, mortgage loan blog, home mortgage loan, mortgage lending practices,
FBI mortgage fraud, Bank of America countrywide, mortgage lenders
