States Gang Up on Countrywide

filed under: Mortgages
TALLAHASSEE, Fla. (July 1) - Countrywide Financial Corp., the nation's largest mortgage lender, was sued Monday by Florida Attorney General Bill McCollum for misleading and unfair trade practices.
The 12-page suit also named Countrywide Chief Executive Angelo R. Mozilo as a defendant. The California-based lender did not immediately return a call for comment on the suit.
"It appears to us Countrywide did no due diligence and accepted applications which were patently fraudulent and reflected no ability on the part of the borrowers to make the required payments," said Marc Taps with Legal Services of North Florida. "The most financially unsophisticated segment of the population was targeted by the brokers who knew Countrywide would write these mortgages."
The complaint, filed in the 17th Judicial Circuit in Broward County, claims Countrywide hid the potential negative effects of its so-called "teaser" loans, including increased interest rates and prepayment penalties.
"It is unthinkable a company would try to take advantage of someone's dream of home ownership," said McCollum, who plans a Tuesday news conference to detail the allegations against the California-based lending giant.
Illinois and California sued Countrywide last week, also accusing the company of persuading homeowners to apply for risky mortgages far beyond their means. Washington Gov. Chris Gregoire has accused Countrywide of cheating the state out of $5 million by underreporting assessments.
Countrywide is in the process of being sold to Bank of America. The Charlotte-based bank expects to close the deal this week, having received the go-ahead from Countrywide shareholders last week.
Attorney General's Fraud Outline: 1-866-966-7226
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2008-07-21 17:01:10
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