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VVance
1674 Posts |
 Posted - 07/18/2008 : 1:30:43 PM
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New Evidence in California AG Countrywide Lawsuit18Jul08
California Attorney General Edmund G. Brown Jr. stepped up his lawsuit against Countrywide Financial while providing more specific details into the mortgage lender’s alleged deceptive practices.
Brown’s amended lawsuit contains more evidence surrounding Countrywide’s “dangerous lending practices,” including individual cases where borrowers were deemed ultra-high risk but still granted an adjustable-rate home loan.
In one case, an 85-year old disabled veteran with a 509 credit score and a debt-to-income ratio of 60 percent was given a three-year ARM that defaulted just months later.
Another two cases highlight unsound underwriting decisions tied to the approval of pay option arm loans, which were eventually approved and defaulted upon within a year.
The amended suit notes that 19 percent of loans originated by Countrywide in 2005 were option arms, and that the loans carried a gross profit margin of about four percent, double those guaranteed by the FHA.
It also claims that the mortgage brokers it took on as partners “misrepresented and obfuscated” the actual terms of these high-risk loans, playing down the impact of negative amortization and telling borrowers prepayment penalties could be waived if they refinanced with Countrywide.
http://www.thetruthaboutmortgage.com/new-evidence-in-california-ag-countrywide-lawsuit/ |
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VVance
1674 Posts |
Posted - 07/18/2008 : 2:01:38 PM
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Add...
Why doesn't AG Brown also sue all lenders that funded IO's, EA 2 and 3's, 5 years fixed, and all with a back-end ratio of 65%.
Oh wait...that would mean he'd be suing every lender in the state... |
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