Countrywide Being Sued By West Virginia State For Foreclosure Troubles
August 20th, 2008
Countrywide Financial is being sued by the Attorney General of West Virginia, for lapses in foreclosure proceedings. Countrywide is being charged for granting risky and other faulty loans to borrowers who were not qualified for loans. Similar charges have been brought by other state governments against Countrywide.
The law suit by the Attorney General of West Virginia, Darrell McGraw was filed on Tuesday 12th August. A county judge has been asked to prevent Countrywide Financial Corporation and four other of its subsidiaries from going ahead with foreclosure proceedings on loans that have been “unfair and deceptive” from the very start.
McGraw has accused Countrywide for trapping gullible customers with teaser rates. The borrowers were caught unawares when the interest rate shot up to 18%! The trick was to entice the potential borrowers with loans that did not require down payments. Appraisals were falsely inflated to permit sanction of generous loan amount. The legal suit seeks compensation for borrowers who lost money on fabricated fees and charges.
Countrywide is now owned by the Bank of America. Shirley Norton, spokesperson of the bank commented that as yet she had not seen the charges and therefore was in no position to comment on it. Via e-mail she said, “We are working hard to combine our two companies and are confident we will be recognized as a leader in responsible lending practices.”
The lawsuit of West Virginia follows the same line taken by the states of California, Illinois, Florida and Connecticut. It could not have been timelier as right now 1.4 million Americans are caught in the foreclosure net. In the country, West Virginia has one of the lowest foreclosure figures but the Attorney General McGraw argues that those who are in the throes of foreclosure need help.
The lawsuit filed by West Virginia is based on the complaints made by about 30 to 50 foreclosure victims, said the Deputy Attorney General Kimberly Stitzinger Jones. In all probability more will be coming in. Although foreclosures are scattered across the state the concentration is high in the Eastern Panhandle and along the route from Huntington to that of White Sulphur Springs.
The suit states that foreclosures including delinquencies on sub-prime ARM mortgages jumped from 37% to 51% from 2006 to 2007. Apart from three other subsidiaries (Countrywide Home Loans, Countrywide Home Loans Servicing, Full Spectrum Lending) the CEO of Countrywide Financial Angelo R. Mozilo have also been accused.
- Florida Courts are Overwhelmed by Foreclosure Cases as Justices Mull Over Solutions
- Spurt in Sales of Foreclosed Properties
- Foreclosure Climate Changes Spirit of Competition to Cooperation Among Contractors
- Bouncing Cheques Issued by Title Companies Lead to Foreclosures
- Increase in Foreclosures Prompting Class Action Legal Suits
- Avoiding Foreclosures by Walking Away From Loans are not Without Problems
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August 20th, 2008 at 9:27 pm
Can’t say I’m surprised!
April 27th, 2009 at 8:01 am
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