skeptic_IHB
New member
Y'all are going to LOVE this.
<a href="http://www.latimes.com/business/la-fi-country26-2008jun26,0,4864584.story">http://www.latimes.com/business/la-fi-country26-2008jun26,0,4864584.story</a>
California attorney general sues Countrywide Financial
Jerry Brown says the nation's largest mortgage lender deceived borrowers about the risks of adjustable-rate loans. Illinois' attorney general is also expected to sue Countrywide today.
By E. Scott Reckard
Los Angeles Times Staff Writer
9:11 AM PDT, June 25, 2008
Countrywide Financial Corp. and its chief executive, Angelo Mozilo, were sued today by California Atty. Gen. Jerry Brown, who accused them of forcing thousands of Californians into foreclosure by deceptively marketing risky adjustable-rate mortgages to borrowers who didn't understand that their monthly payments would one day "explode."
In a complaint filed in Los Angeles County Superior Court, Brown alleges that Countrywide and its top executives, beginning in 2004, plotted to loosen or ignore lending standards so they could make more sub-prime mortgages and other adjustable-rate loans that were promoted by emphasizing low initial rates.
By deceiving borrowers about the risks of these loans, Countrywide's top executives sought to double the lender's share of the national mortgage market to 30%, mass-producing loans that could be sold off and transformed into complex bonds, the suit said.
"Defendants viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard to borrowers' long-term ability to afford them and to sustain homeownership," a draft of Brown's complaint says.
Countrywide spokesman Rick Simon said the company would have no immediate comment on the lawsuit. The mortgage lender, the nation's largest, is expected to face a similar suit today in Illinois.
The California suit, which also names Countrywide President David Sambol as a defendant, asks the court to order an end to what it calls the misleading and unfair practices, and demands that homeowners victimized by the alleged scheme have their money and property returned. The complaint doesn't specify what procedures might be used to accomplish this restitution.
The suit was filed shortly before a scheduled special meeting in Calabasas this morning of Countrywide shareholders at which they were to vote on a plan to sell the company to Bank of America Corp. for stock currently valued at $2.8 billion.
Neither Mozilo nor Sambol would stay on after the takeover. Bank of America initially had said it would retain Sambol to run all of its mortgage operations, including Countrywide, but later said he wouldn't be remaining with the company.
The shareholder meeting represented an opportunity for critics of Mozilo and his pay packages to take one last crack at him.
"Countrywide shareholders watched our CEO and Chairman Angelo Mozilo lead the board into the morass of the sub-prime boom -- a boom fueled by greed and a need to lead," Scott Adams of the American Federation of State, County and Municipal Employees, whose pension fund owns Countrywide shares, said in a statement prepared for presentation at the special meeting.
Brown's suit also lists as defendants the lender's principal subsidiary, Countrywide Home Loans Inc., and a former sub-prime lending unit, Full Spectrum Lending Inc.
The attorney general's sister, Kathleen Brown, head of West Coast municipal finance at Goldman Sachs & Co., served on Countrywide's board from March 2005 through March 2007, when the alleged bad practices were occurring. Neither she nor other nonexecutive directors of Countrywide were named as defendants.
scott.reckard@latimes.com
<a href="http://www.latimes.com/business/la-fi-country26-2008jun26,0,4864584.story">http://www.latimes.com/business/la-fi-country26-2008jun26,0,4864584.story</a>
California attorney general sues Countrywide Financial
Jerry Brown says the nation's largest mortgage lender deceived borrowers about the risks of adjustable-rate loans. Illinois' attorney general is also expected to sue Countrywide today.
By E. Scott Reckard
Los Angeles Times Staff Writer
9:11 AM PDT, June 25, 2008
Countrywide Financial Corp. and its chief executive, Angelo Mozilo, were sued today by California Atty. Gen. Jerry Brown, who accused them of forcing thousands of Californians into foreclosure by deceptively marketing risky adjustable-rate mortgages to borrowers who didn't understand that their monthly payments would one day "explode."
In a complaint filed in Los Angeles County Superior Court, Brown alleges that Countrywide and its top executives, beginning in 2004, plotted to loosen or ignore lending standards so they could make more sub-prime mortgages and other adjustable-rate loans that were promoted by emphasizing low initial rates.
By deceiving borrowers about the risks of these loans, Countrywide's top executives sought to double the lender's share of the national mortgage market to 30%, mass-producing loans that could be sold off and transformed into complex bonds, the suit said.
"Defendants viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard to borrowers' long-term ability to afford them and to sustain homeownership," a draft of Brown's complaint says.
Countrywide spokesman Rick Simon said the company would have no immediate comment on the lawsuit. The mortgage lender, the nation's largest, is expected to face a similar suit today in Illinois.
The California suit, which also names Countrywide President David Sambol as a defendant, asks the court to order an end to what it calls the misleading and unfair practices, and demands that homeowners victimized by the alleged scheme have their money and property returned. The complaint doesn't specify what procedures might be used to accomplish this restitution.
The suit was filed shortly before a scheduled special meeting in Calabasas this morning of Countrywide shareholders at which they were to vote on a plan to sell the company to Bank of America Corp. for stock currently valued at $2.8 billion.
Neither Mozilo nor Sambol would stay on after the takeover. Bank of America initially had said it would retain Sambol to run all of its mortgage operations, including Countrywide, but later said he wouldn't be remaining with the company.
The shareholder meeting represented an opportunity for critics of Mozilo and his pay packages to take one last crack at him.
"Countrywide shareholders watched our CEO and Chairman Angelo Mozilo lead the board into the morass of the sub-prime boom -- a boom fueled by greed and a need to lead," Scott Adams of the American Federation of State, County and Municipal Employees, whose pension fund owns Countrywide shares, said in a statement prepared for presentation at the special meeting.
Brown's suit also lists as defendants the lender's principal subsidiary, Countrywide Home Loans Inc., and a former sub-prime lending unit, Full Spectrum Lending Inc.
The attorney general's sister, Kathleen Brown, head of West Coast municipal finance at Goldman Sachs & Co., served on Countrywide's board from March 2005 through March 2007, when the alleged bad practices were occurring. Neither she nor other nonexecutive directors of Countrywide were named as defendants.
scott.reckard@latimes.com
