Florida Sues Countrywideby Tim Manni
Florida became the third state to sue Countrywide Financial yesterday over predatory lending practices. In a lawsuit filed by Florida’s attorney general, the state accused the mortgage lender of deceiving borrowers into taking loans that Countrywide allegedly knew they could not afford. Illinois and California sued the mortgage financer last Wednesday, the same day Bank of America took over the troubled lender.
Florida’s lawsuit claimed Countrywide knowingly loaned money at higher subprime rates to borrowers who qualified for prime rates. Managers were encouraged to approved subprime loans that the company’s underwriters had previously rejected. The lawsuit claims underwriters were threatened with termination if they investigated into a borrower’s ability to effectively pay back their loan.
Florida and California have the highest mortgage default rates in the country.