Bill McCollum (R)
TALLAHASSEE, Fla. (Legal Newsline)-Florida Attorney General Bill McCollum, the most recent AG to sue mortgage lender Countrywide Financial Corp. over its business practices, said Tuesday he wants a monetary settlement.
McCollum specifically wants Bank of America to settle with the state. On Tuesday, the Charlotte, N.C.-based bank completed its purchase of Countrywide.
"We now have a new cowboy in town owning Countrywide," the Republican attorney general said.
The acquisition was finalized the day after McCollum sued the lender.
"There is technically a deep pocket. They've acquired them, they assume their liabilities," McCollum said.
In his lawsuit, McCollum claims that Calabasas, Calif.-based Countrywide allowed homebuyers to agree to terms the company knew could not be met.
He also accused the company of not clearly disclosing the terms and rates of the agreements.
The lawsuit also alleges that Countrywide threatened to fire its underwriters if they tried to verify borrowers' income or ability to pay.
"They knew very well that these people couldn't qualify," McCollum said.
Attorneys general in California and Illinois late last month filed similar lawsuits against Countrywide.
Named in the lawsuits is Countrywide CEO Angelo Mozilo.
McCollum says the company relaxed its underwriting standards and encouraged home borrowers to enter into lower-interest "teaser" rates while either concealing or misrepresenting that considerably larger payments would loom.
The attorney general is seeking financial compensation for Countrywide's alleged victims and a fine of up $10,000 for each violation of the state's Unfair and Deceptive Trade Practice Act.
"Whenever Bank of America is in a position legally and appropriately to discuss this, we will be glad to discuss it with them," McCollum said of the lawsuit.
From Legal Newsline: Reach reporter Chris Rizo by e-mail at firstname.lastname@example.org.