NEW YORK (Reuters) - Countrywide Financial Corp, which was the largest
U.S. mortgage lender before being acquired by Bank of America Corp
(BAC.N: Quote, Profile, Research, Stock Buzz), faces a Federal Trade
Commission probe into whether its loan-servicing activities violated
federal law.
Countrywide in its quarterly report filed on Monday with the U.S.
Securities and Exchange Commission said the FTC has issued civil
investigative demands requiring it to provide documents.
It said the agency is assessing whether activities related to
Countrywide's $1.49 trillion servicing portfolio, covering roughly 9
million borrowers, violated laws the agency administers.
FTC spokeswoman Claudia Bourne-Farrell confirmed that the agency had
begun a probe but she did not elaborate. Servicers handle billing and
payment collections.
The FTC probe adds to legal headaches for Bank of America, which last
month paid about $2.5 billion to buy Countrywide.
California, Connecticut, Florida and Illinois have all sued
Countrywide over its lending practices. Countrywide also faces U.S.
Department of Justice lawsuits accusing it of abusing or mismanaging
the bankruptcy and foreclosure processes.
Charlotte, North Carolina-based Bank of America last week said
Countrywide also faces a formal SEC probe. This concerns whether
former Countrywide Chief Executive Angelo Mozilo violated insider
trading laws and whether Countrywide's financial disclosures misled
investors, the Los Angeles Times said.
Separately, Countrywide is under investigation by the FBI, authorities
have said. That agency last month said it had 21 corporate targets in
its probe of potential corporate fraud in the mortgage industry.
Calabasas, California-based Countrywide said the Justice Department
cannot confirm or deny whether the FBI is investigating the company.
The Justice Department could not immediately be reached for comment.
(Reporting by Jonathan Stempel; Additional reporting by Diane Bartz in
Washington, D.C., editing by Mark Porter)
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