CT Attorney General Sues Countrywide

Posted by Orb Staff on August 07, 2008 No Comments
Categories : Residential Mortgage

Connecticut Attorney General Richard Blumenthal says his office has sued Countrywide Financial Corp. and related companies for allegedly pushing consumers into deceptive, unaffordable loans and workouts, and charging homeowners in default unjustified and excessive legal fees.

Blumenthal's lawsuit seeks restitution for consumers, as well as fines and forfeitures to the state, for alleged violations of Connecticut consumer protection and banking laws. The action also asks the court to rescind, reform or modify all mortgages that broke state laws.

‘Countrywide conned customers into loans that were clearly unaffordable and unsustainable, turning the American Dream of homeownership into a nightmare,’ Blumenthal says. ‘When consumers defaulted, the company bullied them into workouts doomed to fail. Countrywide crammed unconscionable legal fees into renegotiated loans, digging consumers deeper into debt. The company broke promises that homeowners could refinance, condemning them to hopelessly unaffordable loans.

‘Countrywide was at their side – as an insolvency enabler,’ he continues. ‘Countrywide inflated homeowner incomes to qualify them for loans they couldn't pay back and misled consumers about loan terms.’

The lawsuit seeks civil penalties of up to $100,000 per violation of state banking laws and up to $5,000 per violation of state consumer protection laws, disgorgement of all ill-gotten gains and an order compelling the company to cease its illegal practices.

Source: Office Of CT Attorney General

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