Globe and Mail (CAN) (03/10/08); Schmidt, Robert; Mildenberg, David
The FBI has launched a probe into possible securities fraud at Countrywide Financial Corp. with regard to the subprime mortgage crisis. Among other things, investigators want to know whether executives misrepresented the company's finances and loan quality. The FBI said in January that it was investigating several mortgage lenders, developers and Wall Street banks as a result of the subprime fallout, although names were not given at the time. The federal government is paying closer attention to mortgage lenders due to rising foreclosures, Mortgage Banking Solutions President David Lykken says it will be hard for investigators to prove these firms committed any crimes. "A lot of people were caught up in the atmosphere when the housing market was booming," remarks Lykken. Countrywide officials say they are cooperating with investigators.
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