State Sues Large Mortgage Lender

State Sues Large Mortgage Lender

AG Alleges Countrywide Misled Borrowers

 

Written by: TheIndyChannel.com

 

INDIANAPOLIS -- Indiana has sued Countrywide Home Loan Inc., claiming deceptive and misleading practices in thousands of loans issued in the state.

 

Attorney General Steve Carter on Sunday announced the lawsuit against the country's largest mortgage lender, 6News' Ericka Flye reported.

 

Carter said the actions of Countrywide and parent company Countrywide Financial Corp. were far from fair.

 

The state claims that between July 2005 through this year, Countrywide violated Indiana's Home Loan Practices Act by misleading homeowners about their loans, which differed from the terms in their signed contracts, and inflating consumers' incomes on documents.

 

"People have been led to believe they can get a 1.75 percent rate good for five years -- quite a deal -- but, in fact, that rate has been adjusted after three months," Carter said. "Hopefully this is a warning to some degree to lenders in Indiana that we want them to be fair with Indiana consumers."

 

Carter claimed that in one Indiana case, a person's income was stated in a contract as $14,000 a month when it was just $3,000 a month.

 

The state said Countrywide also provided incentives to employees to sell loans with risky features and misled borrowers about prepayment penalties.

 

"These are people that were told, 'If you sell your home, you're not going to have to pay a prepayment penalty,'" Carter said. "In fact, they've been charged for that."

 

The state wants loan terms it claims were misrepresented voided and is seeking fines and restitution for families affected by the company's loan practices.

 

"We hope that they (borrowers) will file a complaint with the Indiana Attorney General's Office, and they may then become part of this lawsuit," Carter said.

 

In a statement released Monday, Countrywide officials said, "Since taking ownership of Countrywide in July, Bank of America has been involved in a detailed review of Countrywide’s operations. Practices that established Bank of America’s positive reputation and record in home lending are an illustration of how we will operate the combined company."

 

Four additional states have also taken action against Countrywide -- Connecticut, California, Illinois and Florida.

This article and many others can be found on Nationwide Home Owners Assistance (www.nationwidehoa.com)