California, Illinois Sue Countrywide For Mortgage Deception

By | October 8, 2008

http://xenophilia.com/wp-content/uploads/2008/10/housing-bubble-752099.jpgCalifornia Attorney General Edmund G. Brown Jr. today sued Countrywide Financial, its chief executive Angelo Mozilo, and president David Sambol, for engaging in deceptive advertising and unfair competition by pushing homeowners into mass-produced, risky loans for the sole purpose of reselling the mortgages on the secondary market.

“Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market,” Brown said. “The company sold ever-increasing numbers of complex and risky home loans, as quickly as possible.

“Countrywide was, in essence, a mass-production loan factory, producing ever-increasing streams of debt without regard for borrowers. Today’s lawsuit seeks relief for Californians who were ripped off by Countrywide’s deceptive scheme,” he said. …

Teaser rates

The company pushed these loans by emphasizing a low “teaser” or initial rate, often as low as 1 percent for pay option ARMs. … Countrywide operated an extensive telemarketing operation in which it touted its expertise and claimed to find the best financial options for customers. Customer Service representatives at Countrywide call centers were required to complete calls within three minutes, often processing sixty-five to eight-five calls per day. Employees who did not meet quotas were terminated. …

During the course of its investigation into Countrywide, state investigators reviewed hundreds of thousands of documents and interviewed scores of witnesses including consumers and former employees.

Consumers who believe they have been victimized by Countrywide Consumers should file a complaint by contact the Attorney General’s Public Inquiry Unit in writing at Attorney General’s Office California Department of Justice Attn: Public Inquiry Unit P.O. Box 944255, Sacramento, California or through an online complaint form. … The lawsuits were filed on the same day that Countrywide stockholders were voting on the BOA sale. – consumeraffairs

I asked for a 30 year fixed loan, but I was told by the loan expert at Countrywide that I’d just end up paying more that way. I was told I could just refinance in a few years, no matter what happened. That was a lie. You can’t “refinance” once your home is worth less than the amount of your original loan. So far I’ve only gotten the run around about how SB 1137 can help me. It gives rules for Notices of Default. Big deal. What are we actually supposed to do to force our lender to refinance us into a 30 year fixed loan at current market value if we are stuck with an adjustable rate? According to one person in the business:

“…most foreclosure victims lack desire or confidence needed to sustain the effort and fight to settle with their lender servicer.”

Will the Foreclosure Prevention Act of 2008 pass and how will that help?

The whole thing, including what you should do to come out of the housing crisis ahead, is completely explained in this easy to understand video:

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