Countrywide reportedly under FBI investigation

Countrywide reportedly under FBI investigation

money.cnn.com

NEW YORK (CNNMoney.com) -- The FBI has launched an investigation into the lending practices of battered home lender Countrywide Financial Corp., according to a report in The Wall Street Journal. The mortgage company is suspected of widespread fraud, the paper said, which may have contributed to the subprime mortgage crisis that has rocked the U.S. economy.

The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans.

Bank of America, which agreed in January to acquire Countrywide for $4 billion in stock, denied any knowledge of a federal investigation.

Calabasas, Calif.-based Countrywide is the nation's largest home lender, responsible for roughly one-fifth of the mortgages in the United States.

(visit the link for the full news article)

I saw this on the Congressional hearings yesterday - they reported that Countrywide was promising one interest rate, and when the customer showed up to sign the papers, they were given another, higher interest rate. This has contributed to people losing their homes.

That happened to me when I bought my house, except in my case I turned down the higher rate and bought a different house with a better mortgage. I guess I'm one of the lucky ones, because I didn't lose my home.

I think this is an example of what happens when politicians are in bed with big business. Everyone looks the other way with a wink and a nod while the consumer gets screwed. I wish I believed our government would learn from this experience, but I know they won't.

The news on the economy isn't good, and it looks like it's going to get worse before it gets better.

money.cnn.com
(visit the link for the full news article)

I'm going to say something here, and I have a countrywide loan. Its up to the consumer to be educated as to which loan products they choose. Just like a used car ot there are good deals and poor deals, you go to the lot to see all the deals.

Don't try to blame any of the lenders for having a full range of deals. blame the consumers that bought more than the value of their work and not taking the time to educate themselves on the different products. The real blame is on the person who signs. No one else.

reply to post by Illahee


Have you ever heard of bait and switch? It's an illegal business practice.

en.wikipedia.org...

In retail sales, a bait and switch is a form of fraud in which the party putting forth the fraud lures in customers by advertising a product or service at an unprofitably low price, then reveals to potential customers that the advertised good is not available but that a substitute is. The goal of the bait-and-switch is to convince some buyers to purchase the substitute good as a means of avoiding disappointment over not getting the bait, or as a way to recover sunk costs expended to try to obtain the bait. It suggests that the seller will not show the original product or product advertised but instead will demonstrate a more expensive product.

Other advertising practices, such as the use of sales techniques to steer customers away from low-profit items, depend on many of the same psychological mechanisms as a bait and switch. In the United States, courts have held that the purveyor using a bait and switch operation may be subject to a lawsuit by customers for false advertising, and can be sued for trademark infringement by competing manufacturers, retailers, and others who profit from the sale of the product used as bait. However, no cause of action will exist if the purveyor is capable of actually selling the goods advertised, but aggressively pushes a competing product.

I guess you think Enron was OK, too.

i watched & heard the panel of CEOs yesterday, that testified before an
investagative committee of congress...

the founder of CountryWide, at some 40+ years ago, is a revered icon
of the financial- home lender, system of the economy....

his idea was that he would instruct all his workers to bend rules legally, so
as to make home ownership available to all the downtrodden, poor, ethnic, immigrants--- to have a chance of the 'American dream'....

eloquent, heart strumming memes...
i don't buy that Spin

generally CEOs are not chosen because they are ethical,
they leveraged themselves into that position, and the support-troops (aka
company execuitives & outside board members) voted him CEO because of all the financial manipulations and barely legal chichanery he can institute without bringing in the SEC or a state Prosecutor. !!!



the FBI is only in the picture for show --- there are way too many foreign operations which got burned for there not-to-be a show of some sort...
i estimate there will only be two scapegoat
[its too bad the scapegoats will not be able to be 'pardoned' by the outgoing Bush&Co, but will have to serve at least the first 4 years of the new democrat administration] hey hey hey

Originally posted by Illahee
I'm going to say something here, and I have a countrywide loan. Its up to the consumer to be educated as to which loan products they choose. Just like a used car ot there are good deals and poor deals, you go to the lot to see all the deals.

Don't try to blame any of the lenders for having a full range of deals. blame the consumers that bought more than the value of their work and not taking the time to educate themselves on the different products. The real blame is on the person who signs. No one else.

By this reasoning, the rape victim is responsible for the rape. C'mon, they have loan officers who are supposed to know the law and the procedures for obtaining a loan. How could anyone study up enough to be as knowledgeable as a loan officer, without spending their lives doing it. The loan people are there to guide you and instruct you, THAT'S WHY THEY'RE THERE. What the OP is talking about is out and out fraud - telling the consumer one interest rate and then making the rate yet higher when it comes to signing a paper. I believe that's called "Intent to Defraud a Consumer" - it's also illegal.
So we should blame the person because they don't know the law and/or procedures of the mortgage industry, and not blame the criminals who perpetrated these illegal acts?????

Bait and switch is an illegal practice. Then again this is a business transaction and no one is forcing anyone to sign. I had this same thing happen to me By a guy named Joe out of one of the Texas Ditech offices. I told him the way I would agree and he jacked points for a big commish. He lost the loan after wasting a lot of his time. In retrospect I should have turned him in. I however was free to walk away at any time. So is everyone else.

The only group of people responsible for the bubble housing crash is nothing more than the greedy lending practices of the ones that made the deals everybody from the bottom to the top coming within the banking system should all be prosecuted and put in jail.

They all made outrageous profits at the expenses of the hard working tax payer citizens in this nation.

It was not control for this lending business as long as they made the profits.

Truly a shame and despicable.

It is fair to blame corporate greed somewhat; but let's not forget that each prospective homebuyer has the power to say no, even at closing. If bait and switch did happen, and I'm sure it has, the homeowner deserves a fair amount of blame for still going along with the new higher rate if such a rate puts them in an uncomfortable financial situation. I firmly believe that people spend too much time "keeping up with the Jones" instead of doing what's right for them. Unless America is full of brainless zombies, it is completely ludicrous to place 100% of the blame on lenders and creditors. Noone is forcing homeowners to spend that money or get that mortgage.



[edit on 3/8/2008 by titian]