SACRAMENTO, Calif. (Legal Newsline)-California Attorney General Jerry Brown upped the ante Thursday on his legal action against Countrywide Financial Corp. after discovering "shocking new details" about the company's deceptive business practices.

Brown's office issued a press release Thursday claiming the beleaguered mortgage company ignored its own underwriting guidelines and rewarded employees for selling home loans to customers who presented a high degree of risk.

"These shocking new details provide further evidence of Countrywide's dangerous lending practices," Brown said, "which included ignoring borrowers' low credit scores and rewarding employees for selling risky loans."

In June, Brown sued Countrywide alleging misconduct in the sale of loans. Other states, including a prominent lawsuit in Florida that has opponents charging Florida Attorney General Bill McCollum with politicizing the issue, have also sued Countrywide.

In light of the new revelations, Brown amended his lawsuit in Los Angeles Superior Court to include 20 new details about the company's practices, which Brown alleges were meant to deceive customers. The amended suit, according to the Attorney General, had been previously withheld.

Brown's investigation includes the practice of enticing customers with a "very low 'teaser' rate" according to the press release. Higher commissions were paid to loan offices when customers signed loans with higher than normal interest rates and fees than their credit score qualified them for, Brown's suit claims.

"In one case the company approved an adjustable rate mortgage to an 85-year-old disabled veteran with such a low credit score and high debt that he defaulted in less than six months," Brown said.

The Attorney General cited several other specific examples where customers were seemingly destined to fail to make their loan payments, including a borrower who was convinced to take a Pay Option ARM with a one-month teaser rate and a three-year prepayment penalty, plus a home equity line of credit.

"The borrower's debt-to-income was 47 percent and credit score was 663," the press release said. "The loan office offered the loan even though the company's … underwriting review indicated strong doubts about the borrower's ability to repay. The loan closed in January 2006, and a Notice of Default issued in 2007."

As of April, 21.11 percent of mortgages owned by Countrywide Home Loans were in some stage of delinquency or foreclosure, including nearly 48 percent of non-prime loans, according to the Attorney General's latest figures.

Last week in an interview with Legal Newsline, California Deputy Attorney for General Consumer Law Ben Diehl said the ongoing investigation into Countrywide's practices could well have far reaching effects on the industry as a whole.

"We hope to have an impact on the mortgage lending business going forward," Diehl said. "California being the big state that it is, we think ought to have an impact."