Lisa Madigan to Sue Countrywide

By Kevin Robinson in News on Jun 25, 2008 1:00PM

Illinois Attorney General Lisa Madigan is suing Countrywide Financial and its CEO Angelo Mozilo, alleging that the financial institution intentionally defrauded borrowers by selling them mortgages they could not afford. The suit, expected to be filed Wednesday morning in Cook County Circuit Court, charges both Countrywide and Mozilo with deceptive business practices and violating the Illinois Fairness in Lending Act, alleging that the company "engaged in unfair and deceptive practices including the loosening of underwriting standards, structuring unfair loan products with risky features, engaging in misleading marketing and sale techniques and incentivizing employees and brokers to sell more and more loans with risky features." According to the suit, the “vast majority of the loans had inflated income, almost all without the borrower’s knowledge.”

The suit seeks civil penalties up to $50,000 and up to $10,000 for each violation of the state’s Consumer Fraud and Deceptive Practices Act, and asks the court to order Countrywide to cancel or modify all questionable mortgages made since 2004. Madigan is also asking that the court allow her office 90 days to review any mortgages that are in foreclosure or that soon will be. “People were put into loans they did not understand, could not afford and could not get out of,” Madigan said. “This mounting disaster has had an impact on individual homeowners statewide and is having an impact on the global economy. It is all from the greed of people like Angelo Mozilo.”

Photo by City of Progress