Federal investigators probing the business practices of Countrywide Financial Corp. are trying to figure out what Countrywide knew — or in some cases didn’t know — about the incomes and assets of thousands of its borrowers, Wall Street Journal reports.

The investigators are finding that Countrywide’s loan documents often were marked by dubious or erroneous information about its mortgage clients, according to people involved in the matter. The company packaged many of those mortgages into securities and sold them to investors, raising the additional question of whether Countrywide understated the risks such investments carried.

Countrywide, long the No. 1 mortgage company in the U.S. in terms of dollar value of loan originations, also was considered among the most aggressive in finding ways to make home loans to consumers whose qualifications couldn’t be proved or seemed questionable, mortgage industry executives and analysts said. The Federal Bureau of Investigation has begun looking into its practices in pursuing such business, according to people close to the matter.

Shares of Countrywide dropped 14%, or 71 cents, to $4.36, in 4 p.m. composite trading on the New York Stock Exchange yesterday after The Wall Street Journal reported the federal securities-fraud inquiry, which is in an early stage. Bank of America Corp., which is in the process of acquiring the firm for $4 billion, said yesterday that it still plans to complete the purchase later this year. But the plunge in Countrywide’s market capitalization to well below the acquisition price means many investors fear the deal may not go through.

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