California AG Alleges "Shocking New Details" Of Countrywide Lending Practices In Amended Lawsuit Against Lender

From the Office of the California Attorney General:

• California Attorney General Edmund G. Brown Jr. [yesterday] disclosed “shocking new details” about Countrywide Financial’s deceptive business practices which included ignoring their own underwriting guidelines and rewarding employees for selling risky home loans. "These shocking new details provide further evidence of Countrywide's dangerous lending practices, which included ignoring borrowers' low credit scores and rewarding employees for selling risky loans," Attorney General Brown said. "In one case the company approved an adjustable rate mortgage to an 85-year-old disabled veteran with such a low credit score and high debt that he defaulted in less than six months."

• On June 20, 2008 Attorney General Brown sued Countrywide for engaging in deceptive advertising and unfair competition by pushing homeowners into risky loans for the sole purpose of reselling the mortgages on the secondary market. [Yesterday] Brown filed an amended lawsuit in Los Angeles Superior Court which reveals twenty new details about the company's scheme to deceive consumers into taking out dangerous mortgages. The information had been previously withheld from the complaint.

For more, see:

• California AG press release: Atty. Gen. Brown Discloses New Evidence Of Countrywide's Deceptive Practices,
• Amended Lawsuit: People v. Countrywide Financial Corp., et al.,
• Countrywide Lawsuit Frequently Asked Questions: (English) (Spanish).

For a story in The Wall Street Journal on the California AG's amended lawsuit, see Countrywide Filing Shines Light on Loans (may require subscription; if no subscription, try here - then click link for story, then refresh page if necessary).

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