Federal Grand Jury Investigating Three Mortgage Lenders

A federal grand jury is exploring possible fraud charges against three California-based mortgage banks, according to a report from the Associated Press.

Using information from a confidential source, the AP said that subpoenas have been issued to Countrywide Financial, IndyMac Bancorp and New Century Financial. The subpoenas are seeking emails, phone records, financial records and other information.

The scope of the grand jury is not known, but there is speculation that the government is looking into possible crimes, including fraud, that the companies may have committed in conjunction with the issuance of mortgage loans.

The Los Angeles Times also reported that investigators may be looking at whether Countrywide granted favorably mortgages to friends of top management and powerful officials, such as members of Congress.

Countrywide was recently purchased by Bank of America.

IndyMac, which was seized by the government earlier in July (“Government Seizes Control of IndyMac and its $32 billion in Assets,” July 14), is also being investigated by the FBI, according to the AP.