The Collar

California and Illinois Sue Countrywide

By Luke Mullins

Posted: June 26, 2008

Beleaguered mortgage lender Countrywide faces a fresh set of headaches after attorneys general in two states filed lawsuits against the company.

From the Associated Press:

Countrywide Financial Corp. is accused of using misleading advertising and other unfair business practices to trick borrowers into taking on risky home loans they didn't fully understand in a lawsuit filed Wednesday by the California attorney general's office.

The lawsuit—filed on the same day Countrywide shareholders approved the company's takeover by Bank of America Corp.—stems from information gathered under subpoena after the state launched a probe last year into the troubled company's business.

It also came on the same day Illinois's attorney general filed a lawsuit alleging Countrywide engaged in "unfair and deceptive" practices to get homeowners to apply for risky mortgages far beyond their means.

In addition, a Washington State agency alleged in an administrative action that Countrywide participated in "discriminatory lending practices," the Wall Street Journal reported.

So how significant of a problem is this for Countrywide?

From the Journal:

All states are seeking restitution for borrowers. If the states can persuade the courts to grant restitution, it "could be a staggering blow against Countrywide," said Kurt Eggert, a law professor at the School of Law at Chapman University, in Orange, Calif. "Countrywide could be required to give back its profit on all those loans and conceivably give back houses on which it has foreclosed."

The Truth From Experience

Who sits down and go over each document when they refinance their home, no one. Unfortunately, this was my downfall for my current situation. Honesty has been tossed out the window and the only game in town is cut throat. Countrywide intently and maliciously have defrauded my family. I have been dealing with this prooblem for almost three years so I think i've gotten pretty familiar with the game. I attempted to have my home mortgage rectified thrugh countrywide with the modification package which I refused to accept because it was not to my advantage. This past Wednesday I asked for a superviser like I have done so often in the past and out of the clear blue was told that my mortgage payments had been applied towards modification fees which brought my home into foreclosure. This information showed up on my credit report when I attempted to have my home refinanced through private bankers. Never have I recieved a letter indicating that my home was in fortclosure. I have been making intrest only payments for almost three years because this is all I can efford. Coutrywide has recieved one thousand dollars per month to say incase you can't keep giving us all this money we will be responsible for taking your home from you. I wish I could get paid for such services. I had been transferred from one department to another speaking to numerous people with end to an obvious problem for quite some time. It should not have taken this long for someone to finally tell me that my payments had not been applied to my mortgage but had been used for a service which I did not accept. It was all done in the game of cut throat. If their is an attorney who wish to represent me in a lawsuit against countrywide my phone # is 708-712-4923. Phone records will indicate how often I have called coutrywide employees and the notes should indicate dialogue between myself and their people.

Robert Butler of IL @ Apr 25, 2009 11:53:27 AM

Countrywide is a fraudulent lender.. period.

My husband and I owned our house outright. We wanted to remodel our kitchen and bathroom, so we decided to take out an equity loan. Times being what they are, I had been sending smaller payments than what was due, but consistently sending them money. All of the sudden, I am in foreclosure for less than half of my home's actual worth because those payments that they accepted and cashed were not put towards my account because it was not a full payment. I was not told of any of this until it was too late. Now I have spoken with them a zillion times to fix the situation, I got a packet sent via fedex for a loan remodification program. i sent back all the necessary paperwork right away. Last week, I was served with legal documents stating that I am being sued by countrywide for forclosure, which the loan modification program was supposed to have halted. We called their offices and the only answer we get is that there is no sale date and we should not have received court papers, but they are still waiting to see if my loan remodification is approved.. They are liars and cheaters and are trying to take my family home from me when they only loaned me one third of the amount that we originally paid for it in 2004!

of NJ @ Jan 23, 2009 08:24:59 AM

Countrywide should be shut down

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homeowner of IL @ Nov 08, 2008 17:25:29 PM

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The Collar

Luke Mullins is an associate editor at U.S. News, covering banking, real estate, and white-collar crime. He came to the magazine from the American Banker, a financial services daily newspaper, after a stint in the Peace Corps in West Africa and 18 months coaching baseball in the Dominican Republic. Mullins earned a master's degree in journalism from Syracuse University in 2005 and now lives in Washington, D.C., where he grew up. He has written about white-collar criminals for the American magazine, and his work was included in 20 Something Essays by 20 Something Writers: The Best New Voices of 2006, a Random House anthology that appeared on the Boston Globe's bestseller list.

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