Friday, December 17, 2010

Offer Letters and AG countrywide Lawsuit

Attorney General Bill McCollum News Release
July 1, 2008
Media Contact: Sandi Copes
Phone: (850) 245-0150
Florida Attorney General Files Lawsuit Against Countrywide Financial
~ Lawsuit alleges deceptive marketing of loans to boost company profits ~
TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has
filed a lawsuit against Countrywide Financial, one of the nation’s largest mortgage
companies, for allegedly engaging in deceptive and unfair trade practices. The Attorney
General’s lawsuit claims Countrywide put borrowers into mortgages they couldn't afford
or loans with rates and penalties that were misleading. Chief Executive Angelo Mozilo was
also named in the lawsuit.
“It is unthinkable that a company would try to take advantage of someone’s dream of
homeownership,” said Attorney General McCollum. “Florida homeowners who are trying
to protect their homes from foreclosures shouldn’t have to worry about their mortgage
brokers or lenders unfairly profiting at their expense.”
Similar to other mortgage lenders, Countrywide attempted to generate large numbers of
mortgage loans for resale on the secondary mortgage market. In doing so, the company
purportedly originated loans with little concern about whether the borrower could afford
and maintain payments on these loans. In the process, the company allegedly eased or
ignored its own underwriting standards and encouraged borrowers to enter into “teaser”
rates while concealing or misrepresenting that much larger payments would become due.
“Our legal services programs throughout the state have seen a large number of clients
who are now in default on mortgages written by Countrywide. 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. “We cannot help but
conclude that the most financially unsophisticated segment of the population was
targeted by the brokers who knew Countrywide would write these mortgages.”
The lawsuit also claims Countrywide hid any potentially negative effects of these “teaser”
loans, including rising rates, prepayment penalties and negative amortization, which
borrowers would inevitably face if they were making minimum payments or trying to
refinance. Traditionally, lenders require borrowers to document income and assets, but
investigators with the Attorney General’s Office believe Countrywide offered reduced or
no documentation loan programs to increase its loan sales. Countrywide also allegedly
paid greater compensation to brokers for loans with higher interest rates and prepayment
penalties because it could sell those loans for higher prices on the secondary market.
The company’s deceptive marketing practices were supposedly designed to sell costly
loans while hiding or misrepresenting the terms and dangers. Countrywide’s deceptive
sales practices resulted in a large number of loans ending in default and foreclosure, with
the company reporting earlier this year that more than 25 percent of its subprime loans
were delinquent. The Attorney General’s Office received more than 150 complaints about
Countrywide, prompting a subpoena in February and ultimately leading to today’s lawsuit.
Consumers who believe they have been victimized by Countrywide should call the
Attorney General’s fraud hotline at 1-866-966-7226 or may file a complaint online at:
A copy of the lawsuit, filed last night in Broward County Circuit Court, is available online

i blacked out my info...

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