I was interested to learn that the Attorney general of California has joined Illinois in filing a lawsuit against Countrywide. California is also suing its founder, Angelo Mozilo.
California is accusing Countrywide of false advertising and unfair business practices which resulted in homeowners applying for risky mortgages far beyond their means. The allegations are that Countrywide obscured the true affordability of interest only, adjustable rate mortgages and pre-payment penalties - which led borrowers to believe they could refinance before their mortgage interest rates adjusted.
In addition to the thousands of consumers who have been negatively impacted by Countrywide, 7500 employees will lose their jobs as Bank of America closes its purchase of the troubled lender.
I found it ironic that Angelo Mozilo thanked Bank of America for helping to get Countrywide started by lending him $75,000. Today that initial loan has cost the bank over $4 Billion.
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