LOS ANGELES, July 25, 2008
Grand Jury Investigating Subprime Lenders
Countrywide, New Century, IndyMac Probed By Federal Investigators Over Dodgy Mortgages
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A Countrywide Bank Home Loans branch is seen in La Canada Flintridge, Calif., July 24, 2008. (AP Photo/Damian Dovarganes)
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Worried investors line up outside the Indymac office in California. (AP)
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Play CBS Video Video House Bails Out Lenders The House has passed a bill which will grant $25 billion to embattled mortgage giants Fannie Mae and Freddie Mac. As Jim Axelrod reports, President Bush has relented and will sign the bill.
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Video Finding Mortgage Crisis Relief As many Americans struggle with the nationwide mortgage crisis, a non-profit organization called NACA could help homeowners who are stuck in a financial nightmare. Thalia Assuras reports.
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Video Feds Press For Housing Bill Fed chief Ben Bernanke called upon Congress to pass a housing bill that would help struggling homeowners and rescue ailing mortgage lenders. Anthony Mason reports.
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Interactive Inside The FBI See the bureau's highs and lows in this interactive portrait of the crime-fighting agency.
Subpoenas seeking documents have been issued to all three companies, according to the person, who was not authorized to speak publicly about the case and requested anonymity.
The subpoenas are seeking e-mails, phone bills, financial records and other information, according to the Los Angeles Times, which cited unnamed people with direct knowledge of the subpoenas in first reporting the investigation was under way.
The grand jury investigation is the clearest sign yet that prosecutors are investigating whether fraud and other crimes might have contributed to the mortgage crisis that led to the demise of all three California-based lenders.
The Times also said investigators also have begun looking at whether Countrywide and its former chairman, Angelo Mozilo, gave mortgage breaks to influential friends, including members of Congress.
Laura Eimiller, the FBI's spokeswoman in Los Angeles, said she could neither confirm nor deny an investigation.
Countrywide had been the nation's largest originator and servicer of home loans. Its business included subprime loans, many of which went to people with poor credit histories.
California, Illinois and the city of San Diego are suing the company over its lending practices.
Bank of America Corp. bought Countrywide in a deal approved by the lender's shareholders late last month. Scott Silvestri, a spokesman for Bank of America, did not immediately return a call from the AP seeking comment.
New Century had been the second-largest originator of subprime loans in the country before seeking Chapter 11 bankruptcy protection in April 2007.
Federal regulators seized IndyMac's assets on July 11. The bank is the largest regulated thrift in the nation to fail, regulators said.
CBS News' Stephanie Lambidakis confirmed earlier this month that the FBI was investigating IndyMac for possible fraud and that the probe began before its collapse.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Add a Comment See all 12 Comments
- The hearing is to sort through the criminals & arrest the ones without political connections & evidence against congressmen & White House criminals.
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- I really hope their e mail is not of the low quailty as gw bush, rove, rumsfeld, cheney and dem folks. After all their e mail self destructed as those old mission impossible cases did, I remember when-------as the song goes.
Frank Bowers
of Austin, TX - Reply to this comment
- Yea, they would have started this awhile ago, but not all the congressman had cashed out yet...
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- ...Listen folks this is simple stuff, with all these accusations flying around and the feds in the hunt, Some idiot is going to cash out and do something careless like leave a huge bag of money in a convertable (1 million in $20.00 bills weighs like 125 lbs.)The feds are following the money, follow the feds.Who gets blamed for the money being gone? Simple the one the feds are chasing. have fun.
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- Bank of America has been holding checks longer than they advertise, creating returned payments and bounced checks. Then they are charging $35.00 insufficient fund fees for the problems they have caused. There should be a class action law suit against them so their customers can regain their funds back. I have been in the bank to try and resolve these issues and the customer service list is over an hour long with the same types of complaints.
The bank of America is also holding cash deposits that are supposed to be available immediatly. Their excuses for their behavior are BS. - Reply to this comment
- Hang the greedy crooks and stop the bailouts of any kind! It is not truely a free market with bailouts! The dumb as dirt politicians keep preaching free markets until their bank accounts or stocks are at risk then all the less gov is good gov crooks want the GOV to bail them out of their own greed!
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- The Times also said investigators also have begun looking at whether Countrywide and its former chairman, Angelo Mozilo, gave mortgage breaks to influential friends, including members of Congress.
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nice, even more Toe Tappers are loosing sleep..... - Reply to this comment
- I wonder if Chris Dodd is nervous.
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- Posted by maxify55 at 07:59 AM : Jul 25, 2008
I think that it is you who don''t understand. Jail those who gave out fraulent loans, and or any other underhanded schemes. We already have plenty of laws on the books to protect the consumer, lets enforce them.
I''m with you on less governmet all the way! And too, keeep the feds hands off of my money as well. Get rid of the present system of collecting(Employment) taxes, and let the feds go under too!
But with the issue at hand, jail all of these scoundrels, now! - Reply to this comment
- And lest I forget, jail time for those responsible!
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- A federal grand jury is investigating mortgage lenders Countrywide Financial corp,
Good! I hope that by the time they are through with Countrywide, that they forced to shut its doors, and out of business. - Reply to this comment
- And then what?
- Reply to this comment
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
