Wednesday, June 25, 2008

Illinois AG To Tag Countrywide, Mozilo With Civil Suit Related To Shaky Loans; Will Seek To Modify, Rescind Mortgages Made Thru Deceptive Practices

The New York Times reports:

  • The Illinois attorney general is suing Countrywide Financial, the troubled mortgage lender, and Angelo R. Mozilo, its chief executive, contending that the company and its executives defrauded borrowers in the state by selling them costly and defective loans that quickly went into foreclosure.

  • The lawsuit, which is expected to be filed on Wednesday in Illinois state court, accused Countrywide and Mr. Mozilo of relaxing underwriting standards, structuring loans with risky features, and misleading consumers with hidden fees and fake marketing claims, like its heavily advertised “no closing costs loan.” Countrywide also created incentives for its employees and brokers to sell questionable loans by paying them more on such sales, the complaint said.

  • In reviewing one Illinois mortgage broker’s sales of Countrywide loans, the complaint said the “vast majority of the loans had inflated income, almost all without the borrower’s knowledge.”

For more, see Illinois To Sue Countrywide.

See also:

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems. countrywide consumer problems