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| 30 Yr Fix |
5.94% |
-0.16% |
| 15 Yr Fix |
5.63% |
-0.15% |
| 1 Yr ARM |
5.15% |
0.03% |
| 5/1 ARM |
5.90% |
-0.10% |
| 30 Yr Tres |
4.06% |
0.03% |
| Fed Prime |
5.00% |
-0.25% |
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And Yet the Sale of Countrywide is Going to Happen
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The sale of Countrywide Mortgage to Bank of America absorbed another blow this week as three states took legal action against the lender.
The attorneys general of California and Illinois and the Washington State department that regulates financial institutions all filed lawsuits against Countrywide on Tuesday alleging variations on the theme of mortgage fraud.
According to an article in the Wall Street Journal, California's attorney general Edmund G. Brown, Jr. charged that Countrywide used "misleading marketing practices" to steer home buyers into inappropriate loans and that Countrywide was driven by a desire to boost market share and fill demand from investment bankers for loans that could be packaged into securities. California's filing also names controversial Countrywide Chairman Angelo Mozilo and Countrywide president David Sambol.
The lawsuit also alleges that Countrywide loosened its underwriting standards and then often granted exceptions to those looser standards. "The company's Structured Loan Desk in Plano, Texas, was "specifically set up by Countrywide, at the direction" of Messrs. Mozilo and Sambol, to grant underwriting exceptions, the lawsuit says. In 2006, it processed 15,000 to 20,000 loans a month, the lawsuit says."
Illinois Attorney General Lisa Madigan charged in the civil action she filed in state court that Countrywide used unfair and deceptive practices in the sale of mortgage loans.
In Washington State, the Department of Financial Institutions filed an administrative action alleging that Countrywide engages in discriminatory lending practices.
All three states are seeking restitution for borrowers. The Journal quotes Kurt Eggert, a law professor at Chapman University as saying that, if the courts do grant restitution it "could be a staggering blow against Countrywide." The company "could be required to give back its profit on all those loans and conceivably give back houses on which it has foreclosed."
In addition to the three new lawsuits, other legal problems for Countrywide continue to surface. The company and its top executives are under investigation by the FBI, the Securities and Exchange Commission and other federal agencies for mortgage fraud and are the target of numerous lawsuits from employees, shareholders, and borrowers. Analysts have estimated that Bank of America could face more than $9 billion in write-downs related to Countrywide. Bank of America's Chairman and CEO Kenneth D. Lewis has said in the past that the relatively low price his company is paying for Countryside gives Bank of America "plenty of cushion for potential damages, settlements, and other litigation costs."
Connecticut's attorney general Richard Blumenthal said he too is likely to file a lawsuit as part of a second wave of civil actions brought by states against Countrywide. Among the issues Connecticut would allege is "falsely promising refinancing opportunities and lying to consumers about possible risks," said Mr. Blumenthal. Attorneys general in Florida and Iowa also say they are weighing their options.
Neither Countrywide nor Bank of America had spokespersons available to comment on the suit.
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Comments (10)
| Our loan was sold to Countrywide shortly after we got into our house 9 or so years ago. Our monthly payment is always fluctuating and we have a fixed rate. Our payment started at 767 per month and now is up to 1091. All of this talk makes me wonder. |
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| Above Posted By:
Anonymous
| Thu, 9 Oct 2008 01:22:46 EST |
| We had mortgage with Countrywide. when we sold our house they failed to file final papers and instead after they were paid off "sold" our mortgage to another company even though the mortgage no longer existed. this was 4yrs ago and we are still fighting to get it straightened out. A NIGHTMARE! |
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| Above Posted By:
anonymous
| Mon, 15 Sep 2008 04:44:09 EST |
| Countrywide sold me a home and land for $97,000. Except they didn't have the title to the home. Now I own a $30,000, acre lot with some one elses home on it. Add to the fact that I still owe $97,000 for a 1 acre lot. So, I own a $30,000 acre but owe $97,000, Unbelievable. |
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| Above Posted By:
Mike
| Fri, 1 Aug 2008 15:22:42 EST |
| Countrywide is the most fraudulant company that I have ever dealt with from the underwritters on up. They lied from the getgo just to get the deal with us. The underwritters told us we would be paying one mortgage amount and when we got the first statement it was more money. I cannot wait to get out from under this comapny and they really need to get english speaking people that can understand you when they call you or you call them. |
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| Above Posted By:
dee
| Tue, 22 Jul 2008 12:36:16 EST |
| WE HAVE COUNTRYWIDE AND WE DONT HAVE A PROBLEM. IF PEOPLE WOULD STOP BUYING THINGS THAT YOU DONT NEED AND PAY YOUR BILLS, YOU WONT HAVE A PROBLEM PAYING YOUR MORTGAGE |
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| Above Posted By:
ANONYMOUS
| Fri, 11 Jul 2008 11:13:03 EST |
| Give me a break. We all new what we were getting into. We just wanted the houses. |
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| Above Posted By:
Scrooged Myself
| Wed, 2 Jul 2008 17:42:14 EST |
| It's time for cosumers to recieve some justice from state to state!!! |
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| Above Posted By:
Anonymous
| Mon, 30 Jun 2008 21:42:05 EST |
| Where is Georgia in all this? Countrywide picked up HomeBanc, the state's largest and most notorious lender. CW absorbed a company that wreaked with illicit practices and HomeBanc flaunted their size and ego to other mortgage lenders in Georgia. We all knew HomeBanc would someday slither into the darkness, and they found someone similar enough to accept and reward them. HomeBanc was a major part of the mortgage disaster in Georgia, and the only ones left suffering are their customers. I still hear realtors tell me, "Well, HomeBanc could have closed this one!" |
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| Above Posted By:
Marty
| Fri, 27 Jun 2008 06:09:49 EST |
| Hey, don't forget the loosening of appraisal standards.
20 years doing this work, the bankers & brokers (or 95% of them) will not accept legitimate appraisals, only work made
to order.
Don't tell me they don't know the appraisals were pure fraud, they have databases on all the appraisers and mortgage brokers which track their activities.
The corrupt appraisers continue to work. I still see new home builders selling homes at inflated prices, even in this market.
I wonder, why it is that two decades of honest work have not resulted in a boom of appraisal business for me?
Brokers are still the same, and the 50% appraisal fees paid by the AMC's mean its time to move-on.
Imagine being a judge, but paid by only one party who is biased towards the outcome. What incentive is there for pro appraisers to stay in this field, the crap rolls on, the jails should be full of crooks and I should be able to charge 2x as much, instead of half. Strange, if appraisal is so easy, why are billions of dollars being lost? |
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| Above Posted By:
al
| Thu, 26 Jun 2008 16:34:51 EST |
| and I am sure that they will find a way to blame the brokers for this. This type of advertising comes directly from their retail operations or the outbound call centers. I am tired of the entire country being punished for the sins of the Pay Option Arm and Subprime lending. While the borrowers all claim ignorance as to what they were getting in to, the outbound call centers have some responsibility as well. It wasn't the brokers on this one! |
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| Above Posted By:
Loie
| Thu, 26 Jun 2008 13:16:17 EST |
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