Countrywide Probe to Proceed

A federal judge has approved an investigation into Countrywide Financial by bankruptcy investigators, the Wall Street Journal reported. Judge Thomas P. Agresti of the Federal Bankruptcy Court in Pittsburgh on Tuesday allowed the examination of the Calabasas-based mortgage firm’s processing systems by the Office of the United States Trustee to discover if it systematically abused borrowers. The Office of the United States Trustee is a Justice Department arm that polices bankruptcy filings Judge Agresti denied Countrywide’s refutations that an investigation would be a step down a slippery slope toward an investigatory “free for all” of other lenders. The judge cited the trustee’s demonstration of “a common thread of potential wrongdoing” in several bankruptcy filings involving Countrywide. Countrywide acknowledged some errors, but denied that mistreatment is systemic in its handling of mortgages. Agresti is the presiding judge for 293 bankruptcy cases involving accusations of misconduct by Countrywide.