WASHINGTON, Jan. 29, 2008
FBI Probing 14 Companies For Loan Fraud
Companies Under Investigation For Possible Fraud In Connection With Subprime Loans
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(CBS/AP)
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Agency officials did not identify the companies under investigation but said the wide-ranging probe, which began in spring 2007, involves companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors.
The Federal Bureau of Investigation is working in conjunction with the Securities and Exchange Commission on the corporate-fraud probe, said Neil Power, chief of the FBI's economic crimes unit in Washington.
As the nation's housing crisis worsens, there has been a dramatic spike in the number of mortgage fraud cases under investigation. An agency spokesman said 1,210 such cases are open, up from roughly 800 a year ago.
The announcement comes weeks after authorities in New York and Connecticut said they are investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities sold to investors.
Power said the FBI is looking into the practices of so-called subprime lenders, as well as potential accounting fraud committed by financial firms that hold these loans on their books or securitize them and sell them to other investors.
Referring to certain unnamed bankrupt subprime lenders, Power said there are "some irregularities there that we're looking into," including the timing of stock sales by executives. Dozens of subprime lenders have filed for bankruptcy in the past year, most prominently New Century Financial Corp.
"We're looking at the executives to see if they were committing insider trading," Power said.
Power also said law enforcement officials are looking at whether homebuilders manipulated financial statements to inflate revenues.
An SEC spokesman declined to comment. The agency has said about three dozen investigations related to the mortgage market meltdown are ongoing.Defaults on subprime loans have risen over the past 12 months and are primarily responsible for the credit crunch that has disrupted global financial markets.
Morgan Stanley, Goldman Sachs Group Inc. and Bear Stearns Cos. all disclosed in regulatory filings Tuesday that they are cooperating with requests for information from various, but unspecified, regulatory and government agencies. Officials at the companies either declined to comment, or could not immediately be reached.
FBI officials also highlighted what they called a growing pattern of suspected mortgage loan fraud potentially committed when loans were made to shaky borrowers. They cited a surge in "suspicious activity reports" that banks are required to file with the government.
The number of those reports is projected to rise to 60,000 this year after hitting 48,000 last year, up from about 7,000 in 2003. "We're going to have to take a hard look at these things," said Assistant FBI Director Ken Kaiser.
Earlier this month, Connecticut Attorney General Richard Blumenthal said he and New York Attorney General Andrew Cuomo were looking whether banks properly disclosed the high risk of default on so-called "exception" loans — considered even risker than subprime loans — when selling those securities to investors.
In November, Cuomo said he issued subpoenas to government-sponsored mortgage companies Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry. He said he wanted to know about billions of dollars of home loans they bought from banks, including the largest U.S. savings and loan, Washington Mutual Inc., and how appraisals were handled.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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I agree with previous poster McCain was a big player with Keating in the S&L crisis yet he was able to get off by saying %u201CI''m sorry%u201D. Then he skated free as an official of the government.
These rich banking financiers should be locked up for decades based upon what they cost society.
we had 8 years of a balanced budget and relative peace with bill clinton. i voted for bush. but, give me back the democrats! please
ME...I would never of bought a house or anything for that matter I could not afford.
we had 8 years of a balanced budget and relative peace with bill clinton. i voted for bush. but, give me back the democrats! please
Posted by tonic1661 at 07:54 PM : Jan 29, 2008
I hope you remember this post and vote Democratic in November. Welcome!!
Over the last couple of years as I drove around, looking at the McMansions, I wondered where all these people that lived there got their money. Now I understand most really couldn''t afford their homes.
Over the last couple of years as I drove around, looking at the McMansions, I wondered where all these people that lived there got their money. Now I understand most really couldn''''t afford their homes.
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Posted by HSinCO at 09:14 PM : Jan 29, 2008
You qualified for your loan the honest and proper way. You should feel proud of that fact. We have the same issue in my community. Inflated prices on homes, but no jobs in the community pay the kind of money required to afford those homes. Yet, mysteriously, seemingly average people are geting into these homes on $12/hr jobs. Hum???
And to take your thinking to another level,,, when I was 18, in the late 70''s,, I couldn''t even get a credit card, because I did''t make enough money.
So what happened between then and now?
Well,,of course they did. And to maxiumize their take, the home builders hired illegals as well.
This whole country is unraveling, because of the illegals. I called it 1 year ago! That this would happen.
to 1%?????? THIS MORON KNEW EXACTLY WHAT HE WAS DOING
WHEN HE LOWERED INTEREST RATES THIS LOW.GREENSPAN SHOULD
GO TO JAIL!!!!!!!!!!
I also have a number of neighbors who refuse to pay their association dues claiming they can''t afford it. Yet I see them buy new cars and trucks and other expensive items. I and the others end up paying higher due because of these bums. People have too much of a sense of entitlement and think people owe them. All theyh do is screw the rest of us who are hard working and responsible with our wages.
It''s not just the bad companies, there are way too many bad people who took advantage of banks and others too.
blah blah blah
it is the banks job to make sure the information is accurate before lending hundreds of thousands of dollars and so it should be
send them to gitmo
Here''s a portion of the federal government actually doing its job.
I just hope the INS and the DEA are watching and that they remember their own job descriptions.
It''s always written off as "boom" or "bust" periods and we''re led to believe it''s the normal way of things....
financial "products" should be examined before they come to the market by a "financial transparency agency" bipartisan, with the critical optic allowing them to estimate whether or not;
this product could be harmful to your financial health !!
we do it with butter & eggs, why not with financial products?
can you imagine the guy who thought he was buying "asset-backed securities", and finds out only later the assets belonged to some individual of highly unreliable resources?
and if the buyer had known, would he have bought? There are zillions of dollars of this stuff out there!
Surely you are aware Greenspan has been gone quite a while now- at least a year. Are you making some kind of joke? If so I''m not getting it. The correct move here IS to lower rates. Why do you think that is not a smart move?
January 30, 2008 Body parts litter Interstates 80/380 .....
www.pocono communitynews.com
Posted by eskieville1
Lol, you are joking right? If he is dictated by the republican whip, McCain will do nothing more that what Hoover did - NOTHING.
After they got all of our money, now they''re going to try to con each other!
Justice may yet be served!
Remember when in spring of 2001 the Stock market SPiked Downward? that was because of ENRON''s illegal dealings and accounting frauding people and it was the tip of an iceberg of about 9 major companies doing the same thing caught around the same time. This was when Bush announced Tighter corporate governance and some laws were passed.
That was the major reason the stock market slid downward for a time because there was PLENTY of money sitting in Investors accounts waiting, but they were skittish. The Tech bubble burst as well and that was bad for investor perception.
Well here we go again for round 2. 14 companies investigated and I will bet you 12 -13 of them are guilty of intentional fraud and questionable if not illegal accounting practices. And i''ll bet at least a half dozen more get investigated by year''s end.
This will PUMMEL the stock market, regardless of incentives.
I`m just glad I didn`t refinance the loan
on Wendnesday
WoW how much lower can he Go?
``
Jack Be nibble, Jack be quick,
Jack Jump over Limbo Stick,
Limbo, Limbo, Limbo Rock,
doot do do do doot doot ...
Limbo Limbo Limbo rock
doot do do do doot doot ...
when you do the Limbo Rock.
Gee How much Lower can he Go? ``
Sincerely your almost convinced Bear
Fuzzy
If it sounds too good to be true, it probably is.
Foreclosures have gone up by 79%. Maybe some of us have learned our lesson. Maybe not. The kind of people that fall for the make-money-in-real-estate-with-no-money-down scams.
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by sophielhu
February 1, 2008 5:51 AM EST
- Just think what would happen if we privatize Social Security and turn what is left of the fund over to the tender mercies of the Wall Street crooks? Wall Street needs more regulation not less.
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