Another State to Sue Countrywide

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Connecticut Attorney General Richard Blumenthal said he plans to sue mortgage lender Countrywide Financial Corp, alleging its loan practices violated state consumer and banking laws.

Calabasas-based Countywide, which was bought by Bank of America Corp. last month, also has been sued by attorneys general in California, Illinois and Florida. They accuse the company of luring customers into loans they were unable to afford.

“The evidence consists of inflated incomes that were in the loan documents, representations that were made to those homeowners that were taking loans, and maybe most troubling the statements made by Countrywide representatives that the home owners could refinance their loans later if the interest payments rose to a level they couldn’t afford,” Blumenthal said during an interview on FOX Business Network. “Then the company reneged on the promise to refinance and added fees.”

Blumenthal said he has no plans to sue Countrywide’s new parent. “Bank of America didn’t own Countrywide at the time that they committed the alleged violations of law, which gives Bank of America in my view not only a different legal situation, but also perhaps a different perspective.”

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