Florida probes Countrywide over subprime loans
Florida has subpoenaed Countrywide Financial Corp (CFC.N: Quote, Profile, Research) as part of a widening investigation into subprime lending practices, the state’s attorney general said on Thursday.
Attorney General Bill McCollum told fellow cabinet members the investigation involving the nation’s largest mortgage lender was linked to practices that may have hurt Florida’s state-run investment pool.
McCollum’s office issued the subpoena to the California-based company on January 17, seeking information and documents on Countrywide’s lending practices, especially relating to subprime loans that go to people with poor credit histories.
“It’s a broad subpoena seeking information about whether or not the company potentially violated Florida’s deceptive and unfair trade practices act in a manner related to mortgages,” McCollom’s spokeswoman Sandi Copes told Reuters.
“Countrywide has received the subpoena from the Florida Attorney General and will cooperate fully with the State’s investigation,” the company said in a statement guaranteed cash advance loan. “As a matter of policy, Countrywide does not comment further on the status of pending investigations.”
The subpoena is part of a larger investigation of the industry in response to the subprime lending fiasco.
In November, investors made a multibillion-dollar run on the state’s Local Government Investment Pool after a small percentage of its investments were downgraded to “junk” status.
The pool, which local governments and schools use like a money market account, saw deposits drop from nearly $27 billion to less than $10 billion in a matter of weeks as depositors withdrew their funds.