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Reports: FBI probes Countrywide, other lenders

Investigations focus on securitization, servicing of home loans

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Countrywide Financial Corp. is reportedly one of more than a dozen companies under investigation by the FBI as it looks into the packaging of subprime loans as securities sold to Wall Street investors. According to reports in the Wall Street Journal and New York Times over the weekend, the investigation was initially focused on determining whether Countrywide misrepresented its financial condition and the quality of its loans in regulatory filings with the Securities and Exchange Commission. The Journal today reported that the FBI is also looking at Countrywide's underwriting practices on stated-income loans. Countrywide officials have said they were not aware that the company is the subject of any such investigation but have denied wrongdoing in lawsuits involving similar issues. FBI officials briefed reporters in January about an investigation involving 14 financial services companies, mortgage lenders and investment banks. Although the FBI did not identify the compa...