States going after Countrywide

By Alan White

Illinois, California and Washington all filed actions against Countrywide this week alleging a variety of deceptive practices and fair lending violations. The California complaint attacks a variety of origination practices, especially involving negative amortizing mortgages (so-called pay option ARMs) and hybrid ARMs. The Washington DFI's complaint proposes to revoke Countrywide's license to make mortgage loans in the state, based among other things on evidence of race discrimination in mortgage pricing. Illinois Attorney General Lisa Madigan's particularly thorough and well-researched complaint focuses on unreasonable forecosure risk as a violation of consumer fraud and fair lending laws, but also challenges other origination and servicing practices.

North Carolina's Banking Department entered into a consent order with Countrywide last March, and Countrywide has surrendered a number of branch licenses in New York. It seems likely that other states will join, and perhaps organize a multi-state task force, as was done in the Ameriquest and Household Finance cases, among others. If any commenters are aware of other state filings I will be happy to add links to this post. (HT NY Post for the graphic.)

All this on the heels of the shareholders' approval of the merger between Countrywide and BankofAmerica. Approval by the Countrywide shareholders, that is.

UPDATE: The June 30 complaint filed by the FLORIDA attorney general is available here.

Comments

[Cynthia Brown]

During our foreclosure we attempted to sell our house. Countrywide was holding the second deed on our house. We had a offer for $160,000, in which countrywide would received $60,000 of the $100,000 that we owed. After two months of waiting for their dicission, they countered-offer for $20,000 more. The buyer agreed to the increase within the week. Countrywide again waited two more months before accepting this offer. The buyer backed out because of the time lost in Countrywide making up their minds. We our in process of filing a complaint with the State of Oregon for unreasonable foreclosure practices. Is there any suggestions of other action that can be done? Footnote: Countrywide settle for $28,000 at their foreclosure and the 1st mortgage holder was paid in full by the buyer of Countrywide 2nd deed.

[Richard Anderson]

This is a common theme for CW, hence all the problems they have been having.

Richard Anderson
http://bestnodocloans.com