Groups ask Calif. AG to step up pressure on Countrywide

Legal News Line Aug. 11, 2008, 11:00am

Jerry Brown (D)

SACRAMENTO, Calif. (Legal Newsline) -- Two California-based groups have asked the California attorney general to enact a moratorium on foreclosures by Countrywide Financial Corp.

In a letter sent last week to Attorney General Jerry Brown, the California Reinvestment Coalition and the Greenlining Institute urged Brown to step in even more forcibly to the home mortgage crisis that threatens almost one million California homeowners, now facing the potential loss of their homes.

The California Reinvestment Coalition advocates for low-income people and minorities, with a focus on ensuring fair access to banking and financial institutions. The San Francisco-based Greenlining Institute describes itself as a multi-ethnic policy research and advocacy organization.

Brown has already filed a lawsuit against Countrywide, alleging the company forced people into loans they could not afford and engaged in other fraudulent activities. State attorneys general in Florida and Illinois have filed similar suits against the California-based company, which is now owned by Bank of America.

"We commend your lawsuit against Countrywide Financial," the letter said, "we urge you to do more. You have the power to file for a preliminary injunction preventing Bank of America from foreclosing on Countrywide loans created through fraud."

The two groups assert that the crisis has risen to such levels that only drastic action can stem the tide of home foreclosures.

"Anything short of a moratorium on foreclosures relating to Countrywide's fraud could leave hundreds of thousands of Californians facing foreclosure," the letter said.

The group also asked to meet with Brown. The attorney general's office has not yet released a statement whether they will meet with these groups, or if they are considering the request.

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