Florida sues Countrywide Financial
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07/01/08 Mitch E. Perry
WMNF Drive-Time News Tuesday | Listen to this entire show:

Florida Attorney General Bill McCollum announced that today that his office has filed a lawsuit against Countrywide Financial, one of the nation’s largest mortgage companies, for allegedly engaging in deceptive and unfair trade policies. Countywide Chief Executive Angelo Mizilo was also named in the lawsuit.

Florida becomes the third state to sue Countrywide, following similar lawsuits in California and Illinois last week. Attorney General McCollum issued a subpoena in January to Countrywide seeking information about loan underwriting and customer service.

In the lawsuit, the state alleges that the company lowered its underwriting standards.

McCollum says he has no idea how many Floridians were affected by Countrywide, but in a statement his office reported that it was more than 150 people.

McCollum said he had no breakdown on the percentage of minorities who have been affected in Florida by Countrywide, and would only say that it was obviously lower income people who had suffered.

Bank of America recently spent $3 billion to take over Countrywide. McCollum said he expected to speak to BofA attorneys on the lawsuit in the ensuing weeks. Countrywide has acknowledged losses of more than $2.5 billion amid rising defaults and foreclosures.

The lawsuit does not specify a dollar amount for relief. Florida law allows up to a $10,000 fine for every violation of the Unfair Deceptive Trade Practices Act.

The lawsuit also claims Countrywide hid any potentially negative effects of “teaser” loans, including rising rates, prepayment penalties and negative amortization borrowers would inevitably face if they were making minimum payments or trying to refinance.

Florida homeowners who believe they may have been victimized by Countrywide should call the Attorney General’s fraud hotline at 1-866-966-7226, or file a complaint online at myfloridalegal.com.

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