Several weeks ago, Indiana sued Countrywide Financial Corp., thus becoming the latest state to take the mortgage lender to court over its lending practices. Indiana Attorney General Steve Carter said in a news release that a state investigation had uncovered a “pattern of misleading and questionable practices” by Countrywide Home Loans Inc. and its parent company. The investigation found that “homeowners were misled when they were told one thing about their loans while signing contracts that indicated other terms.
The suit alleges that Countrywide misrepresented or omitted terms on interest rates, the workings of adjustable rate loans and the loans’ costs. It also alleges that borrowers were misled about prepayment penalties and that some borrowers’ incomes were inflated on applications so that they would qualify for loans. The lawsuit asks the court to void the prepayment penalties and any part of the loans resulting from alleged deceptive acts. Attorneys General in California, Connecticut, Florida and Illinois also have sued the lender, which faces numerous other lawsuits related to its lending practices. As previously reported, Countrywide’s shareholders approved a takeover by Charlotte, North Carolina-based Bank of America in June.
Source: Associated Press
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