TALLAHASSEE (AP) _ Florida's attorney general alleged Tuesday that Countrywide Financial Corp., the nation's largest mortgage lender, engaged in deceptive practices that left borrowers in the state with mortgages they couldn't afford.
“They knew very well these people didn't qualify,'' Attorney General Bill McCollum said Tuesday, commenting on a lawsuit he filed Monday against Countrywide for unspecified damages.
Charlotte, N.C.-based Bank of America Corp. completed its purchase of Countrywide on Tuesday.
The suit, filed in the 17th Judicial Circuit in Broward County, claims the lender hid from borrowers the potential costs of some loans, including higher interest rates and prepayment penalties.
“We believe Countrywide took steps they shouldn't have … to allow people to own property that they could not reasonably be expected to have made payments on,'' McCollum said, in remarks to reporters.
Countrywide said in a statement that it would not comment on the specifics of the lawsuit but plans to cooperate with McCollum's office.
Illinois and California sued Countrywide last week, alleging the company persuaded homeowners to apply for risky mortgages far beyond their means. Washington Gov. Chris Gregoire has accused the company of cheating the state out of $5 million by underreporting assessments
McCollum said he had wanted to file the suit while Countrywide was still a separate entity but will not be stopped by the takeover.
“This is going to take some time to resolve,'' McCollum conceded. “We're perfectly willing to discuss this with any of the parties.''
McCollum said his office didn't know how many Floridians might be affected by Countrywide's practices, but suspected the number will grow as they become aware of the state's lawsuit.
He also said he has not discussed the litigation with his counterparts in other states.
On the Net: www.myfloridalegal.com
PIctured above is Florida Attorney General Bill McCollum.