FBI Investigating Countrywide

| About: Countrywide Financial (CFC)

Why am I not at all surprised about this?

"The Federal Bureau of Investigation is probing subprime lender Countrywide Financial Corp. (CFC) for possible securities fraud, according to law-enforcement officials and finance-industry executives.

The inquiry involves whether company officials made misrepresentations about the company's financial position and the quality of its mortgage loans in securities filings, four people with knowledge of the matter said. It is at an early stage, they emphasized. . .

Fifteen other subprime companies also are under scrutiny by federal agents and prosecutors in a broad look at the subprime industry sparked by huge losses on residential mortgages and the securities used to fund them. The investigations are examining mortgage-origination fraud, conflicts of interest and undisclosed relationships within the industry, and the practices used to package mortgage-backed securities for sale to investors.

Countrywide issued more than $100 billion in mortgage-backed securities between 2004 and 2007, according to the newsletter Asset Backed Alert. More than two dozen Wall Street firms helped construct those deals, making it possible that some of them will also face law-enforcement scrutiny."

I suspect we shall be learning a lot more about Angelo Mozilo's stewardship, as well as those giant and well-timed stock sales. Someone is gonna be in a heckuva lot-o-trouble...

FBI Investigates Countrywide
U.S. Scrutinizes Filings On Financial Strength, Loan Quality for Fraud
WSJ, March 8, 2008; Page A3