Three Mortgage Lenders Under Federal Investigation

St. Louis Post-Dispatch (07/25/08); Schmitt, Richard B.
A federal grand jury in Los Angeles has started investigating Countrywide Financial Corp., IndyMac Bancorp Inc. and New Century Financial Corp.--three of the country's biggest subprime mortgage lenders--seeking everything from bank records to past e-mail correspondence. The subpoenas follow interviews that federal investigators conducted with employees and others knowledgeable about the lending operations of the California institutions, all three of which crumbled after making a long string of bad loans. The probes are part of a Justice Department campaign that until now has centered on smaller operators that defrauded homeowners and mortgage lenders. The subpoenas are proof that the U.S. government is beginning to scrutinize the nation's larger lenders to determine whether they were complicit in the billions of dollars that have been lost in the mortgage boom going bust.