Home  News Local News Attorney General files suit
|
Attorney General files suit |
|
|
|
|
Saturday, 05 July 2008 |
Attorney General Bill McCollum has filed a lawsuit against Countrywide Financial Corporation for unspecified damages, it was reported Tuesday. The suit alleges that Countrywide, the nation's largest mortgage lender, engaged in deceptive practices that left Florida borrowers with mortgages they couldn't afford. The suit which was filed in the 17th Judicial Circuit in Broward County also claims the lender hid from borrowers the potential costs of some loans, including higher interest rates and prepayment penalties.
During most of the past five years Countrywide made numerous loans to Floridians, including hundreds in South Florida. Most of these borrowers were enticed by soft mortgages offered by the giant mortgage which gave them the opportunity to own their own home.
In a statement on Tuesday McCollum said that Countrywide “knew very well these people didn't qualify." He said that the state believes that the lender took steps they shouldn't have and by doing this allowed people to own property that they could not reasonably be expected to have made payments on.
Countrywide said in a statement that it would not comment on the specifics of the lawsuit but plans to cooperate with McCollum's office.
Countrywide was founded in California in 1969; according to information obtained from its website, it was founded with a commitment to break down the barriers to owning a home. The mortgage lender quickly grew to be the nation’s leading home mortgage lender, helping millions of families find ways to accomplish their home ownership needs, whether buying a first home or refinancing their current loan.
The states of Illinois and California also sued Countrywide last week, alleging the company persuaded homeowners to apply for risky mortgages far beyond their means and Washington’s Governor Claris Gregoire has accused the company of cheating the state out of $5 million by underreporting home assessments.
Reeling from significant losses from the sub-prime mortgage loan crisis, it was announced earlier this year that Bank of America is in the process of acquiring Countrywide.
McCollum said he the lawsuit filed by the state would not be stopped because of the pending acquisition, although he wanted to file the suit while the lender was a separate entity. McCollum admitted the suit could take some time to be resolved, and although he didn’t know how many Floridians were affected by Countrywide lending practices, he suspected the number would be large, as homeowners become aware of the state’s lawsuit.
|
|
|
|
