Subprime Mortgage Crisis - Regulatory Proposals and Long-term Solutions - Law Investigations, Judicial and Other Responses

Law Investigations, Judicial and Other Responses

Significant law enforcement action and litigation is resulting from the crisis. The U.S. Federal Bureau of Investigation was looking into the possibility of fraud by mortgage financing companies Fannie Mae and Freddie Mac, Lehman Brothers, and insurer American International Group, among others. New York Attorney General Andrew Cuomo is suing Long Island based Amerimod, one of the nation's largest loan modification corporations for fraud, and has issued 14 subpoenas to other similar companies. The FBI also assigned more agents to mortgage-related crimes and its caseload has dramatically increased. The FBI began a probe of Countrywide Financial in March 2008 for possible fraudulent lending practices and securities fraud.

Over 300 civil lawsuits were filed in federal courts during 2007 related to the subprime crisis. The number of filings in state courts was not quantified but is also believed to be significant.

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