Associated Press Reports: Feds investigating Countrywide lender
Federal authorities are investigating Countrywide Financial Corp. for securities fraud, according to media reports. The FBI is in the early stages of an inquiry into whether officials misrepresented the company's financial position and the quality of its mortgage loans, the Wall Street Journal first reported on Saturday, citing law enforcement officials and finance executives. The Justice Department is also involved in the investigation into the nation's largest mortgage lender, said the New York Times, which also cited anonymous sources who said they were not authorized to discuss ongoing criminal matters.

Reports: Feds investigating Countrywide lender
Authorities looking into allegations of securities fraud

Associated Press
LOS ANGELES — Federal authorities are investigating Countrywide Financial Corp. for securities fraud, according to media reports.

The FBI is in the early stages of an inquiry into whether officials misrepresented the company's financial position and the quality of its mortgage loans, the Wall Street Journal first reported on Saturday, citing law enforcement officials and finance executives.

The Justice Department is also involved in the investigation into the nation's largest mortgage lender, said the New York Times, which also cited anonymous sources who said they were not authorized to discuss ongoing criminal matters.

"We are not aware of any such investigation," Countrywide spokeswoman Susan Martin told the Times.

FBI spokesman Richard Kolko declined to confirm for the Times that an investigation had been opened.

Investigators are looking at evidence that may suggest that company executives knew their mortgage securities would see many more defaults than predicted in public documents, one source told the Journal.

The inquiry is part of a larger probe involving as many as 15 companies and comes in the midst of the subprime-mortgage crisis.

Bank of America Corp. is in the process of acquiring California-based Countrywide for about $4 billion in stock. Bank of America agreed to the acquisition in January, and the transaction is expected to close in the third quarter. A Bank of America spokesman declined to comment.

Countrywide CEO Angelo Mozilo was one of three mortgage industry executives brought before a congressional committee on Friday to defend their exorbitant pay at a time the industry was reeling.

Congressional figures showed that Countrywide lost $1.2 billion in the third quarter of 2007 and $422 million more in the fourth quarter. The company's stock fell 80 percent between February and the end of the year.

During the same period, Mozilo received a $1.9 million salary, $20 million in stock awards contingent upon performance and sold $121 million in stock.
http://www.chron.com/disp/story.mpl/front/5604883.html