California Sues Countrywide Financial For Deceptive Practices
By Doug Jacobs on Jul 27, 2008 in Mortgage Issues, Mortgage Servicer Abuses
Attorney General Brown of California has filed suit on behalf of the State suing Countrywide Financial for Mortgage abuses and deceptive practices. The suit is one of the first of its kind in this day and age of sub-prime loans and soaring foreclosures.
The lawsuit alleges a number of abuses committed by Countrywide, chief among them the creation of complicated and adjustable rate loans being offered at “teaser” rates to encourage homeowners to agree to them. Then Countrywide would quickly sell them for huge profits, knowing, according to the lawsuit, that there was little chance the homeowner would be able to maintain their payments.
It’s that kind of practice that is destroying the American dream of homeownership, according to the suit. Would be first time home buyers are lulled into mortgages and agreements they can’t possible maintain, resulting in default and foreclosure of their home.
It will be interesting to see how this suit develops.
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