Troubled Countrywide Faces FBI Probe
Fraud allegations made against the Countrywide Financial Corporation brought the Federal Bureau of Investigation at the company’s doorstep. The investigation will involve the examination of underwriting and lending practices as well as possible misrepresentation of subprime loan-related losses. Countrywide, one of the biggest lenders in the nation was acquired by Bank of America last January after its subprime lending operation resulted to billions in losses.
Over the past couple of years, financial experts have looked into the subprime mortgage industry as the root of the present housing market crisis. Subprime mortgages are housing loans that were taken out by borrowers with shaky credit history. In addition, these mortgages were packaged with adjustable interest rates that reset after a couple of years. Once the interest rates reset, subprime borrowers found themselves with mortgage payments that ballooned by almost 40 percent. Most of these mortgages eventually defaulted and ended up in foreclosure.
Just last week, Countrywide CEOs testified and defended themselves in front of the House Committee on Government Oversight Reforms for receiving substantial compensation packages despite the company’s financial problems. Countrywide owned one fifth of all mortgages in the nation and when the housing market started crashing, millions of their mortgages went into default.
The large inventory of foreclosure properties has eventually affected the housing market – home prices declined and home sales became sluggish. Surprisingly, most sales activities are generated by buyers who consider foreclosed properties as worthwhile investment.
With a price tag that is a fraction of their current market value, these foreclosure homes are indeed a steal. Buyers should only remember that these distressed properties are sold “as is” and a budget for repair works should be set aside. Brokers like Foreclosure Listings Nationwide can provide buyers with access to the hottest foreclosed homes sold in the market.
Start your search for countrywide foreclosure listings.
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