FBI Is Looking Into Fraud Allegations Against Countrywide
The story was first reported in The Wall Street Journal Saturday.
The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans, the paper said.Subprime mortgages, or home loans given to borrowers with weak credit, have been at the root of a crisis that has rocked the U.S. economy.
Though the Federal Bureau of Investigation has acknowledged ongoing investigations related to the subprime debacle, neither the FBI nor the Justice Department would comment on the specific targets.
Bank of America to buy Countrywide
Bank of America Corp. said Friday it has agreed to buy Countrywide Financial for $4 billion in stock, a deal that both rescues the country’s biggest mortgage lender and expands the financial services empire of the nation’s largest consumer bank.
The acquisition will make Charlotte-based Bank of America the nation’s biggest mortgage lender and loan servicer.
“Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation’s premier lender to consumers,” Bank of America chief executive Ken Lewis said in a statement.