California sues Countrywide, alleging ‘exploding’ mortgages

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News item this morning from the L.A. Times: ‘Countrywide Financial Corp. and its chief executive, Angelo Mozilo, were sued today by California Atty. Gen. Jerry Brown, who accused them of forcing thousands of Californians into foreclosure by deceptively marketing risky adjustable-rate mortgages to borrowers who didn’t understand that their monthly payments would one day ‘explode.’

‘In a complaint filed in Los Angeles County Superior Court, Brown alleges that Countrywide and its top executives, beginning in 2004, plotted to loosen or ignore lending standards so they could make more sub-prime mortgages and other adjustable-rate loans that were promoted by emphasizing low initial rates.... Countrywide spokesman Rick Simon said the company would have no immediate comment on the lawsuit. The mortgage lender, the nation’s largest, is expected to face a similar suit today in Illinois.’

The New York Times first reported the Illinois lawsuit last night.

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Photo Credit: Los Angeles Times