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Countrywide Financial under securities fraud investigation: report

[JURIST] The US Department of Justice and the Federal Bureau of Investigation (FBI) [official websites] have launched a criminal investigation into troubled mortgage lender Countrywide Financial [corporate website], according to a New York Times report Sunday. Federal authorities are investigating whether Countrywide criminally misrepresented its financial condition. The FBI is also cooperating with the Securities and Exchange Commission (SEC) [official website] in investigating whether lenders violated securities laws in the private mortgage bond market [BBC backgrounder].

Bank of America is in the process of acquiring [Bloomberg report] Countrywide, the largest mortgage lender in the US. Lenders across the United States are facing additional scrutiny from state and federal officials in the wake of the sharp increase of home foreclosures on high-risk borrowers. The New York Times has more. Reuters has additional coverage.

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