Countrywide is at it again in Illinois - State of Illinois Files Suit against CW!

Mortgage and Lending with Larry Bettag - Cherry Creek Mortgage

"Countrywide's unfair lending practices have harmed tens of thousands of borrowers who've been placed in unaffordable loans and, as a result, our communities are now being destabilized by a skyrocketing number of home foreclosures," Lisa Madigan said in a statement Wednesday. Her office said that the company played a "major role" in the foreclosure crisis, all in an attempt to dominate the U.S. mortgage market. "Countrywide repeatedly qualified borrowers for mortgage loans based on salaries that were significantly higher than what they really made," Madigan added. "As a result, Countrywide put borrowers into loans that they could never afford, leading to high failure rates." Among other things, the suit asks the court to rescind or reform all Countrywide loans originated "with the use of unfair and deceptive practices." "This includes providing financial relief to borrowers who lost their homes to foreclosure, refinanced, sold or have loans currently being serviced by Countrywide, even if that requires Countrywide to repurchase loans from current investor owners," according to Madigan's office. A spokesman for Countrywide couldn't immediately be reached Wednesday afternoon.

Mozillo is being sued personally as well.  This will be interesting.  I'm told today that there are 67 loan officers at CW who are being investigated in Illinois for putting people in these loans that the don't qualify for, specifically using MTAs, COFIs as well as other loans.  I'm not sure about the veracity of this statement.  There's a lot on the net about the mess CW is in, but a local recruiter for CW is now telling my loan officers that they're no longer a part of CW, but rather B of A now that the shareholders have approved the sale.  I'm sorry, but just because you put a different mask on an ugly kid, it's still an ugly kid.

We've signed three local CW LOs in the last 2 months and are talking with others that are just marking their time until they leave.  It'll be interesting to see how this all shakes out, but it seems that the name change alone won't changes reputation in Illinois.  Only time will tell.

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-- Casey Brischle
Columbia Bank - Spokane, WA
Spokane Home Loan Mortgage Professional

This is just surface stuff.  It doesn't fix the problem.  The problem runs much deeper than CW (or lender to put it in general terms)...FM and FM were buying these loans. I don't knwo the more I think about whom to blame the more my head hurts! :)

Jun 26, 2008 10:42 AM #1
Larry Bettag
Larry Bettag - Cherry Creek Mortgage - Saint Charles, IL
Regional Vice-President

Wow Casey....this is good stuff.  I do think that some companies have so much more scrutiny on who works for them.  I really do.  I recruit for a living and some company's seem almost downright snobbish on who they'll let through the door just for these issues and they're mid majors whom you NEVER hear a negative peep out of.  Privately held companies are better at using discretionary standards it seems.  However, you're point on FM and FM buying the're right.  But sometimes the agencies don't know until performance blows up or audits happen.  You just don't know.  The problem with each agency is that they often sample from "pools" instead of just auditing each file.  That means the problems can incubate longer before discovery.  Casey....what a great vantage point for the different variables...thanks for the thoughts.

Jun 26, 2008 02:24 PM #2
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

I am just waiting to see what is going to happen after everything is done. I heard about this yesterday. I am sure B OF A is not happy about this since they just brought Countrywide. People are just too freaking greedy. Great post.

Jun 26, 2008 04:52 PM #3
Amanda Hoaginquist, mortgage freedom IL

I have a hard time listening (reading) to the backwash of the mortgage industry befouling the discussion on the mortgage crisis.  Let the first person not to have ever used a loan product that they would not personally utilize strike the first note on the war drums.  Otherwise...the Cherry Creeks and the Freedom Mortgages of the world who have yet to keep a loan to service (essentially throwing their garbage loans on the books of other unsuspecting lenders), should keep their heads low and their misleading, holier-than-thou preachings to a minimum.  Frank, honest conversation about profit driven brokers and loan officers that feed on the ignorance of their customer base can never take place if the muck is constantly stirred by disingenuous, specious idolators.  Carefully worded, borderline libelous blogosphere diarrhea serves solely the source and not the solution.  Or, "so I am told."

Jul 14, 2008 08:30 AM #4
Larry Bettag
Larry Bettag - Cherry Creek Mortgage - Saint Charles, IL
Regional Vice-President're so right.  Most everyone has done that...what the reports were about was "THE PRACTICE" of putting people in those loans.  That implies more of a willful intent.  That's it, but you're quite right Amanda (?) about most all companies having had employees who have had this...We had one that doesn't work here any more.  Glad that person doesn't have that ability to do that.  Nice comments.

Jul 14, 2008 08:48 AM #5
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