Countrywide Being Investigated - Is This Bank Of America’s Out?
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The business practices of Countrywide Financial are being investigated by the FBI according to Bloomberg. While it is hard to keep track of everything, the charges of security fraud are hard to get out of if Mozilo selling a huge chunk of his stock right before the share price tanked does raise a red flag.
With Bank Of America looking to buy Countrywide would a large scale investigation give them the out if they did not want to go through with the deal? The clash of cultures and rot under the surface of Countrywide must be raising some red flags in the boardroom of Bank of America. A large scale investigation into securities fraud would be just the thing to allow BoA to scuttle the deal.
Investigators are focusing on whether Countrywide officials misrepresented the company’s financial position and the quality of its mortgage loans in securities filings, said the person, who declined to be identified because he wasn’t authorized to speak about the probe. He described the inquiry, reported earlier today by the Wall Street Journal, as preliminary.
Countrywide is among at least 14 companies that the FBI is checking for possible accounting violations related to the subprime lending crisis, including mortgage lenders, housing developers and Wall Street firms that package loans as securities. The FBI announced the review in January without identifying any of the companies. via Bloomberg
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Comment by Craig Tone on 9 March 2008:
Countrywide is taking a big fall here. It has been nothing but bad news after bad news for them. BOA is going to drop the buyout like a bad habit.
I wouldn’t be surprised if the BOA merger allowed teh books to be opened for BOA to give the FBI the evidence it needed to shut them down.
Comment by Betty on 13 May 2008:
I refinanced with countrywide a few years ago. My husband was in an accident and was disabled and I took over his business and was very stressed out. I spoke to Tom Brockington of Countrywide, he was their loan specialist. I asked him on three different occasions if my taxes and insurance where included in my payment and he assured me that that where. Otherwise, I would have never accepted that high of a payment. Things got worse for us with the real estate business going into the toilet and we had to relocate our office to our home. I didn’t have my September payment and called them ahead of time to ask if they could move a couple of my payments to the end of my loan or to extend my mortgage to make my payments more affordable. I had equity in my home. They have given me the run around with many phone calls made back and forth and they told me not to do anything until I heard from them. Now of course they want to foreclose. Does anybody have any help for my family?