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FTC Probes Bear Stearns Mortgage Unit

The commission asks for documents from EMC Mortgage as part of a broader investigation into subprime lending.
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Bear Stearns


unit is coming under government scrutiny in a probe of residential lending to risky borrowers.

The investment bank's

EMC Mortgage

unit received a request for documents from the Federal Trade Commission to see whether it violated consumer protection laws, according to

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The Associated Press


The request follows a Dec. 8 resolution by the FTC authorizing investigations into subprime lenders, loan servicers and brokers.

Bear Stearns disclosed the inquiry in a regulatory filing by a mortgage trust it set up. It said it's cooperating with the investigation.

The investment bank's shares finished the year at $115.53.

Exotic loans such as interest-only mortgages have helped fuel the nation's housing boom. But regulators, worried such products are being offered to subprime borrowers who can't afford more traditional mortgages,

recently proposed guidelines aimed at tightening lending standards.