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State Officials Expand Lawsuit Against Countrywide

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Jul 17, 2008 5:23 pm US/Pacific

State Officials Expand Lawsuit Against Countrywide

Staff Was Allegedly Rewarded For Selling Risky Loans

LOS ANGELES (AP) ― State officials have expanded a previously filed lawsuit against Countrywide Financial Corp., adding allegations that the mortgage lender rewarded staff for selling risky loans.
 
The California attorney general's office detailed the new claims Thursday, amending a lawsuit that accuses Countrywide of deceiving borrowers with misleading advertisements and other unfair practices.
 
The latest filing says Countrywide paid higher commissions for putting borrowers into loans with higher rates and fees than they qualified for based upon credit scores and other factors.

It says the company once approved an adjustable rate mortgage for an 85-year-old disabled veteran with such a low credit score and high debt that he defaulted in less than six months.

Countrywide had no immediate comment on the new allegations.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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