The State of Illinois has filed a lawsuit against former mortgage giant Countrywide Financial Corporation, alleging that it used discriminatory lending practices in regards to its minority borrowers. The lawsuit, which was filed in state court by Illinois Attorney General Lisa Madigan, alleged that an investigation had revealed African-American and Latino borrowers were much more likely to be given risky subprime loans by Countrywide as opposed to similarly-situated whites from 2005 to 2007. It was also alleged that a statistical analysis revealed Countrywide had charged Latino and African-American borrowers more interest and fees on certain mortgages than whites. Now a subsidiary of Bank of America, Countrywide Financial Corporation was the largest mortgage lender in Illinois from 2004 to 2006.
The lawsuit estimated that Countrywide’s practices caused roughly 6,000 Latino and African-American borrowers to be led into subprime mortgages, and in some instances charged higher prices for their mortgages. Overall, the Illinois Attorney General’s investigation determined that African-American and Latino borrowers were three times more likely to receive a higher-cost subprime mortgage than those of white borrowers.
As you should know, Countrywide has been hit with a number of lawsuits regarding its lending practices. In an unrelated lawsuit that was resolved in the fall of 2008, Illinois, California and at least six other states reached an $8.8 billion settlement with Countrywide that stemmed from a lawsuit claiming the company and its executives had defrauded its borrowers. Additionally, in May of 2010, Countrywide agreed to pay $108 million to settle Federal Trade Commission charges after allegations that the company collected excessive fees from cash-strapped borrowers who were struggling to keep their homes. These are just two examples of several suits that have been filed against Countrywide targeting its wrongful lending practices.
If you have any questions about predatory lending or mortgage servicing fraud, please contact Bill Robertson, a lawyer in our firm’s Consumer Fraud Section. Bill is currently handling cases against Countrywide and other companies involving predatory lending practices. He is also handling cases involving mortgage servicing fraud of several different companies. If you need more information, contact Bill at 800-898-2034 or by email at Bill.Robertson@beasleyallen.com.
Source: Chicago Tribune
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