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FBI Begins Fraud Probe of IndyMac Mortgages

Failed bank may have given improper loans to people with bad credit

By John Johnson, Newser Staff

Posted Jul 16, 2008 7:11 PM CDT

(Newser) – The FBI is investigating failed bank IndyMac for possible fraud related to its mortgage-lending business, Bloomberg reports. The agency is looking into whether the bank gave improper loans to people with shaky credit. It is working closely with the FDIC, which seized the bank's assets last week. IndyMac specialized in so-called Alt-A mortgages that did not require people to document their incomes, Bloomberg notes.

It's not clear whether the investigation began before the bank failed, the AP says, or what penalties might be meted out to a now-defunct entity. The FBI provided few details but said it is now investigating 21 investment banks, hedge funds, and mortgage companies related to the subprime crisis, up two from last month.

Lillian Krasn, left, and Hanita Horowitz complain about waiting in line outside IndyMac Bank, Tuesday, July 15, 2008, in Encino, Calif. (AP Photo/Nick Ut)

Robert Brown, FDIC ombudsman, gives information to Gloria Mittry on how to get her money back outside IndyMac bank Tuesday, July 15, 2008 in Encino, Calif. (AP Photo/Nick Ut)

The IndyMac Bank logo is seen at a branch Pasadena, Calif. (AP Photo/Damian Dovarganes)

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FBI Begins Fraud Probe of IndyMac Mortgages

Failed bank may have given improper loans to people with bad credit

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Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

FDIC Launches 50 Criminal Inquiries of Failed Banks

But it won't name names yet

FDIC Closes Bank No. 28: NYC's Park Avenue Bank

Latest to fail had about $1B on the books

FDIC Seizes 4 More Banks

Tally hits 26 this year; pace of closures expected to increase in coming months

Lending Falls at Fastest Rate Since 1942

Boatload of bank failures likely in 2010

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FBI Begins Fraud Probe of IndyMac Mortgages

Failed bank may have given improper loans to people with bad credit

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OTHER STORIES ON OUR RADAR

housing market • IndyMac • bank fraud • FDIC • bank failure

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

FDIC Launches 50 Criminal Inquiries of Failed Banks

But it won't name names yet

FDIC Closes Bank No. 28: NYC's Park Avenue Bank

Latest to fail had about $1B on the books

FDIC Seizes 4 More Banks

Tally hits 26 this year; pace of closures expected to increase in coming months

Lending Falls at Fastest Rate Since 1942

Boatload of bank failures likely in 2010

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?