Indiana AG the latest to sue Countrywide Financial

By Chris Rizo | Aug 24, 2008

Steve Carter (R)

INDIANAPOLIS, Ind. - Indiana Attorney General Steve Carter on Sunday became the latest attorney general to sue Countrywide Financial Corp. over its lending practices.

In a statement Sunday, Carter said a state investigation uncovered that Countrywide engaged in a "pattern of misleading and questionable practices."

The Republican attorney general said Indiana homeowners were "misled" by the Calabasas, Calif.-based company, which allegedly would mislead consumers about the terms of their loan.

Among other things, Carter said consumers were misled about how adjustable-rate mortgages work. He also said Countrywide inflated some borrowers' incomes so that they would qualify for loans.

"These unfair lending practices may have harmed thousands of people and, in turn, negatively affected our communities and neighborhoods throughout the state," Carter said in a statement.

The AG filed his lawsuit Friday in Steuben County Court. Already, attorneys general in California, Connecticut, Florida, West Virginia and Illinois have filed suit against Countrywide, which was recently acquitted by Bank of America, based in Charlotte, N.C.

Carter is seeking civil penalties of up to $15,500 per violation of state consumer protection statutes, as well as investigative costs and consumer restitution in an amount to be determined at trial.

He is also asking for a court order to void prepayment penalties on Countrywide originated loans and void any portion of the Countrywide originated loans resulting from the alleged deceptive acts.

"Before more people face the prospect of foreclosure or actually lose their homes, we need to determine whether individual loans may have been originated through methods that violated Indiana law," Carter said.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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