Daily News and Information for the Mortgage Loan Originator
Countrywide Under FBI Investigation
Monday, March 10, 2008
- By Staff Writer, Originator Times
CALABASAS, CA - Countrywide Financial Corporation is being investigated by the FBI after allegations arose that the mortgage giant engaged in unethical or illegal practices.
The investigation, which is reported to be in the early stages, centers around Countrywide’s underwriting and origination practices. The FBI also wants to know if Countrywide lied about losses related to subprime loans.
To date, neither the FBI or Countrywide have commented publicly on the investigation.
News of the investigation spread just days after Countrywide’s CEO, Angelo Mozilo, testified at a hearing before the U.S. House Committee on Government and Oversight Reform. Former Merrill Lynch Chairman and CEO Stanley O'Neal and ex-Citigroup chief Charles Prince also testified. The trio were present to defend their hefty compensation packages. The committee wanted to know why these executives were richly rewarded when their companies failed to perform and lost billions.
In February, The Originator Times reported that Countrywide was involved in at least two other lawsuits. Countrywide KB Home Loans is being sued by a former high-level employee who claims he was unjustly fired after complaining to his superiors about what he thought were unscrupulous lending practices going on within the company.
The city of Cleveland announced they were suing 21 of the nation's top lenders, including Countrywide, alleging they violated Ohio's public nuisance law. The city claims that unscrupulous lending practices that propagated the foreclosure crisis have wreaked havoc on Cleveland's neighborhoods, thereby creating a public nuisance.
Countrywide, based in Calabasas, California, is the largest home lender in the United States and originates approximately one-fifth of the nation’s mortgages.
Freddie Mac recently honored Countrywide for achieving Tier One Platinum performance rankings for superior investor reporting and default management during 2007. Freddie Mac also inducted Countrywide into its Tier One Hall of Fame for achieving Tier One status for four consecutive years.
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21 Lenders Sued for Causing Foreclosure Mess 21 lenders including some of nation's top lenders have been named as defendants in a new lawsuit. The lenders are being sued for alleged unscrupulous lending practices which propagated the foreclosure crisis in another major U.S. city. This is the second lawsuit of its kind in less than a week.
Countrywide Whistleblower Sues for Unjust Firing Countrywide KB Home Loans is being sued by a former high-level employee who claims he was unjustly fired after complaining to his superiors about what he thought were unscrupulous lending practices going on within the company.
Mortgage CEOs Under Fire Countrywide Financial's founder and CEO Angelo Mozilo, former Merrill Lynch Chairman and CEO Stanley O'Neal, and ex-Citigroup chief Charles Prince defended their hefty compensation packages in front of a U.S. Congressional committee. The committee wanted to know why these executives were richly rewarded when their companies failed to perform.
Task Force Forms to Deepen Lending Probe Federal investigative agencies, including the IRS and the FBI, have joined together to form a task force to deepen their probe into potential crimes perpetrated by major players and individual brokers within the mortgage industry.
Four of the Nation's Largest Home Builders Settle Over Violations Centex Homes, KB Home, Pulte Homes, and Richmond American Homes, have agreed to pay civil penalties totaling $4.3 million to resolve alleged violations by the Justice Department and the U.S. Environmental Protection Agency.
