HARTFORD, Conn. (Legal Newsline) - It has been a busy year for Countrywide Financial Corp. and the state attorneys general watching it.
Connecticut Attorney General Richard Blumenthal announced Wednesday that he demanded -- and Countrywide promised -- that consumers harmed by a security breach at the company will be compensated.
Former Countrywide employee Rene Rebollo of Pasadena was arrested in August by the FBI, which says he sold sensitive consumer data. Blumenthal wants an agreement in writing with Countrywide, already the target of lawsuits by a handful of attorneys general, that shows the company is committed to offering compensation.
"Thousands of Countrywide consumers in Connecticut deserve an iron-clad promise of protection -- and we are demanding it," Blumenthal said. "This security breach, impacting millions nationally, was the result of deliberate criminal intent to exploit private consumer data.
"This sensitive and lucrative information was allegedly intentionally stolen and sold for profit to third parties who could exploit the information for their own benefit."
Countrywide is also facing lawsuits over its business practices. Attorneys general like Indiana's Steve 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.
California's Jerry Brown, Florida's Bill McCollum, West Virginia's Darrell McGraw, Illinois' Lisa Madigan and Blumenthal have all filed similar suits against the company.
Blumenthal said at least 28,123 consumers have been put at risk by the security breach.
"Even more than most security breaches, the threat to consumers here is especially real and urgent because their information was allegedly deliberately exposed and exploited," Blumenthal said. "My office is seeking more details and promises, in writing, that Countrywide consumers will be protected for years to come."
Countrywide has established a hotline for information and questions. It can be reached at 1-866-451-5895.
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.