SEC Investigates ResCap For Possible Mortgage Fraud

Law360, New York (August 28, 2012, 3:58 PM EDT) -- The U.S. Securities and Exchange Commission is investigating whether the bankrupt mortgage subsidiary of Ally Financial Inc. committed fraud as part of its mortgage lending and underwriting practices, the agency said in court filings Monday.

The SEC said it was inspecting Residential Capital LLC loans that were packaged into mortgage-backed securities. The agency was forced to reveal its investigation, likely among the last connected to the 2008 financial crisis, in order to compel R.R. Donnelley & Sons to turn over due diligence reports it prepared for...
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