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January 30, 2008
FBI announces criminal inquiry into mortgage lending
Papers are reporting that the FBI Economic Crimes unit has announced a criminal inquiry into the mortgage meltdown (New York Times, F.B.I. Opens Subprime Inquiry by Vikas Bajaj and Los Angeles Times, FBI is pursuing 14 probes of lenders by Scott Reckard). Two interesting points: State enforcers have also played an important role in policing this market. From the New York Times: "Earlier this decade, a group of attorneys general reached settlements totaling more than $800 million with two large lenders: Household International, now part of HSBC, and Ameriquest." The investor cops at the SEC are also watching. From the LA Times: Officials at the Securities and Exchange Commission are conducting more than 30 investigations into the mortgage meltdown. Erik R. Sirri, head of the SEC's market regulation division, said recently that securities firms and banks sold "too many lottery tickets" tied to home loans and failed to look closely enough at their growing risks. The FBI is looking at many of the same cases as the SEC, the agency said. Meanwhile, over at the Consumer Law and Policy blog, Alan White analyzes a Mortgage Bankers Association release criticizing our allies at the Center for Responsible Lending: MBA & CRL duke it out on Bankruptcy reform.
Posted by Ed Mierzwinski at January 30, 2008 07:03 AM
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