LOS ANGELES, Dec. 14 (Xinhua) -- The U.S. No. 1 mortgage lender, Countrywide Financial Corp., was under investigation by California Attorney General Jerry Brown and the attorney general's office in Illinois, it was reported on Friday.

    Countrywide has acknowledged receiving subpoenas for documents from California and Illinois but declined to elaborate, citing company policy, the Los Angeles Times reported.

    The company said it was cooperating in the two probes.

    A spokesman for Brown told the newspaper he couldn't comment. The attorney general has said he was taking a broad look into the lending practices of mortgage bankers and mortgage brokers and what roles they might have played in the mortgage meltdown crisis.

    The investigation in Illinois, first reported in the New York Times, grew out of a probe into broker One Source Mortgage, which the state has charged with luring borrowers into loans they could not afford, according to the report.

    Countrywide was the chief provider of these loans -- known as pay-option mortgages -- which allow a borrower to pay less than the full interest that comes due each month, sending the loan balance up.

    A former employee of One Source told investigators that the only Countrywide loan the broker tried to sell was the pay-option type because the rebates were so huge, Veronica Spicer, an assistant Illinois attorney general in the consumer protection division, said in comments reported by the newspaper.

    Spicer said her office sent a subpoena for documents to Countrywide in mid-September.

    Mark Belongia, a lawyer for One Source, told The Times the broker would be vindicated because the nature of the loans was disclosed carefully to borrowers. "We originated a legal product in a legal manner," he said. 

U.S. economy jolted by subprime troubles

    WASHINGTON, Dec. 6 (Xinhua) -- The U.S. economy this year was jolted by a "quake", with its epicenter at the high-risk subprime mortgage market and its aftermath expected to linger well into next year. Full story

Relief on way for U.S. subprime mortgage homeowners

    BEIJING, Dec. 6 (Xinhuanet) -- U.S. homeowners whose adjustable-rate loans are resetting to monthly payments they can't afford will be in line for some relief when President George Bush on Thursday announces details of a plan to help stave off a wave of mortgage foreclosures.

    Under terms of an agreement between the administration and lenders, interest rates would be frozen for five years on certain subprime mortgages, congressional aides said. Full story

Swiss Re hit by U.S. subprime mortgage crisis

    GENEVA, Nov. 19 (Xinhua) -- The world's biggest reinsurer Swiss Re has become the latest company to suffer a major loss as a result of the subprime crisis in the United States, the company said on Monday.

    In a statement, the Zurich-based reinsurer said it had to writedown 1.2 billion Swiss francs (about 1.1 billion U.S. dollars) in October, which amounted to 981 million Swiss francs (about 878 million U.S. dollars) after tax.Full story