Saturday, August 6, 2011

Federal probes of mortgage lenders fizzle: report

Federal criminal investigations into failed mortgage lenders IndyMac Bancorp and New Century Financial Corp have stalled, the Wall Street Journal reported on Saturday.
A third probe, into Washington Mutual Inc (WaMu), has ended with no charges being filed, the Department of Justice said.
Both the IndyMac and Century Financial investigations were essentially dormant, the newspaper said, citing people familiar with the situation. Both probes could still gain new momentum if fresh evidence surfaced, the newspaper said.
The three investigations were among the first to weigh criminal charges against the companies and executives at the heart of the housing crisis, which was in part caused by offering so-called sub-prime loans to people who may not have otherwise qualified for credit.
The U.S. Attorney's office in Los Angeles, which initiated the IndyMac and New Century probes, could not be reached for comment.
The Justice Department, in a statement dated on Friday, said its investigation closed after hundreds of interviews and review of millions of documents related to WaMu's operations and subsequent failure. The evidence did not meet the standards for criminal charges, the statement said.More...

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