CNN is reporting this morning that Countrywide is now the subject of an FBI investigation into their lending practices. Countrywide is suspected of engaging in “widespread fraud…which may have contributed to the subprime mortgage crisis that has rocked the U.S. economy.”

The FBI will investigate Countrywide’s underwriting practices, the way loans were originated and their accounting representations to shareholders in regards to subprime loan losses.

I wonder if there are more whistleblowers ready to share what they know, or perhaps they already have which is what prompted the investigation.

This makes me believe that we are going to see many, many, many lenders in the next several weeks coming clean very fast about any accounting irregularities that they might have been trying to delay.

In addition, watch for underwriting guidelines to FURTHER tighten and expect that all publicly traded companies to come out with new “best practices” guidelines for all employees and third party originators. The big question is, will the new best practices guidelines will apply to senior management?

I’m trying to imagine what it would be like to be a Countrywide employee today, facing the possibility of being interviewed by the FBI.