Exclusive: Credit Suisse faces US probe into mortgage products
News from Reuters:

The logo of Swiss bank Credit Suisse is seen on a building at Paradeplatz square in Zurich, February 13, 2013.

Credit: Reuters/Michael Buholzer

NEW YORK | Fri Feb 22, 2013 3:27pm EST

NEW YORK (Reuters) – The U.S. Attorney’s Office in New Jersey is investigating Credit Suisse AG over mortgage-backed securities packaged and sold by the bank, according to people familiar with the matter.

U.S. Attorney’s Offices in other districts are focusing on other banks in related investigations, said the people, who were not authorized to speak publicly. It was unclear how many U.S. Attorneys were involved.

The investigations show that authorities are still trying to build cases over the alleged misconduct by banks that led to the 2008 financial crisis.

The New Jersey probe came out of a working group created by President…………… continues on Reuters

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Related News:

Study confirms widespread mortgage fraud
News from CBS News:

(MoneyWatch) The housing crisis started with a slew of bad loans. You know the story line: Lenders issued loans to borrowers for homes they couldn’t afford, who then defaulted on those loans. It all ended in tears and foreclosures.

Perhaps less well known is that fraud was a endemic during the housing bubble. A recent study found the lenders weren’t just making bad deals — they were falsifying documents in order to make loans look better on paper. Banks then sold these bogus mortgages to investors all over the world. The paper adds to the growing body of research that shows conclusively that banks knew they were writing bad loans, often in violation of their own lending standards.

Some examples of this fraud. A mortgage was made to look on paper like it was being taken out for a primary residence when it was really for an investment property. On paper, a buyer with two mortgages looked like he or she only had one. Credit scores were manipulated and appraisals were inflated.

This benefited both bank and borrower: Because the loans looked more secure, the borrower got a lower interest

Ultimately, many of these mortgages turned out to be toxic. In their paper, Tomasz Piskorski and James…………… continues on CBS News

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