Illinois's attorney general issued subpoenas yesterday to units of Countrywide Financial Corp. and Wells Fargo & Co., for an investigation into whether lenders have improperly steered minority borrowers into high-cost or inappropriate loans, the New York Times rerpots.
The subpoena joins a long list of investigations by state and federal officials examining the business practices of the nation's mortgage lenders. Critics say such companies played a major role in the housing and mortgage crisis, which has led to record levels of home foreclosures.
n Florida, Attorney General Bill McCollum is looking to determine whether Countrywide put borrowers into loans they couldn't afford or loans with rates that weren't what the company was advertising or were misleading. The Securities and Exchange Commission is probing Countrywide's accounting practices. In January, the City of Baltimore sued Wells Fargo, alleging that it systematically targeted low-income minority homeowners for loans they couldn't afford, in violation of the Fair Housing Act.
In Illinois, Attorney General Lisa Madigan is trying to determine whether Countrywide, the nation's largest mortgage lender, and Wells Fargo, the second-largest lender, put black and Latino borrowers in subprime or other high-cost loans when they could have qualified for a lower-cost loan.
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