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October 06, 2008
Countrywide/BofA to pay $8 billion in mortgage case
Well, if all those Countrywide subprime option ARM loans were entered into by knowing consumers who understood the "fair" terms of their contracts, why has the new Countrywide owner, Bank of America, agreed to an $8 billion (record by far) settlement over predatory practices with those pesky state Attorneys General? From the Wall Street Journal (pd. subs. req'd): With this settlement, we have the first-of-its-kind mandatory loan modification program," said Illinois Attorney General Lisa Madigan, who had filed a civil lawsuit alleging that Countrywide engaged in unfair and deceptive practices. "This program is going to help homeowners stay in their homes, which ultimately helps investors," she added. "It will shore up communities and therefore it will help with the economy. More from Attorney General Jerry Brown of California in his release:
“Unlike last week’s congressional bailout, this loan-modification program provides real relief for borrowers at risk of losing their homes. Tragically, California and the other states have had to step in because federal authorities shamelessly failed to even minimally regulate mortgage lending.” Predatory? Brown's release adds: Countrywide deceived borrowers by misrepresenting loan terms, loan payment increases, and borrowers’ ability to afford loans.
Posted by Ed Mierzwinski at October 6, 2008 05:42 AM
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