Mortgage analysis firm to cooperate in NY probe
Mortgage loan analysis company Clayton Holdings Inc will help New York's attorney general with his investigation into possible fraud in the U.S. mortgage market, a spokesman for the attorney general said on Sunday.
By Agencies |
WASHINGTON: Mortgage loan analysis company Clayton Holdings Inc will help New York's attorney general with his investigation into possible fraud in the U.S. mortgage market, a spokesman for the attorney general said on Sunday.
Andrew Cuomo, the state's top lawyer, began a wide-ranging investigation last spring into how Wall Street bundled and sold billions of dollars of home loans to investors.
Clayton is the largest U.S. due-diligence company hired by investment houses to make sure blocks of loans conform to the seller's own standards. Investment houses may decide to accept or reject a due-diligence company's opinion on the quality of mortgage loans.
The company said it was served subpoenas in June and it has agreed to provide documents and testimony in exchange for immunity from civil and criminal prosecution in New York, said a spokesman for Cuomo. A source familiar with the investigation said attorneys are looking into whether Clayton's reports, which were generally unseen by investors, held damaging details that should have been disclosed.
The company said in a statement on Saturday that it had "entered into a cooperation agreement" with Cuomo and would tell what it knows about how Wall Street sold mortgage investments after receiving warnings from Clayton that the underlying home loans did not meet quality standards.
Andrew Cuomo, the state's top lawyer, began a wide-ranging investigation last spring into how Wall Street bundled and sold billions of dollars of home loans to investors.
Clayton is the largest U.S. due-diligence company hired by investment houses to make sure blocks of loans conform to the seller's own standards. Investment houses may decide to accept or reject a due-diligence company's opinion on the quality of mortgage loans.
The company said it was served subpoenas in June and it has agreed to provide documents and testimony in exchange for immunity from civil and criminal prosecution in New York, said a spokesman for Cuomo. A source familiar with the investigation said attorneys are looking into whether Clayton's reports, which were generally unseen by investors, held damaging details that should have been disclosed.
The company said in a statement on Saturday that it had "entered into a cooperation agreement" with Cuomo and would tell what it knows about how Wall Street sold mortgage investments after receiving warnings from Clayton that the underlying home loans did not meet quality standards.
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