About the Author
Moe Bedard is a leading expert and trusted authority in regards to loan workouts and loan modifications. Moe is the founder and President of Loan Safe Solutions, LoanSafe.org and the main contributor to LoanWorkout.org. He has blogged on this subject more than any other person on earth and has personally been involved in over 300 loan workouts and mortgage audits.
Countrywide Accused of Selling Defective Loans
One of my long standing points of view on the mortgage and housing crisis is that, these creative loans that were invented, sold and sliced and diced over the last 3-5 years were incredibly unfair and deceptive. Defective credit instruments that were made to fail and are essentially “lemon loans.”
It looks like the Illinois Attorney General seems to agree with my point of view.
The Illinois attorney general is suing Countrywide Financial, the troubled mortgage lender, and Angelo R. Mozilo, its chief executive, contending that the company and its executives defrauded borrowers in the state by selling them costly and defective loans that quickly went into foreclosure.
The lawsuit, which is expected to be filed on Wednesday in Illinois state court, accused Countrywide and Mr. Mozilo of relaxing underwriting standards, structuring loans with risky features, and misleading consumers with hidden fees and fake marketing claims, like its heavily advertised “no closing costs loan.” Countrywide also created incentives for its employees and brokers to sell questionable loans by paying them more on such sales, the complaint said.
In reviewing one Illinois mortgage broker’s sales of Countrywide loans, the complaint said the “vast majority of the loans had inflated income, almost all without the borrower’s knowledge.”
My company, Loan Safe Solutions, performs mortgage audits for attorneys and consumers across the country and in doing so, we have noticed a pattern of abuse from loan officers, brokers and lenders. The #1 abuser that seems to cross our desks every day is Countrywide Home Loans.
The country’s biggest fish holds the largest stock pile of toxic and fraudulent loans than any other lender in the foreclosure sea. It looks like our country’s law makers are starting to understand the fact that there is something every fishy in these loans, and the stench is starting to fill our court rooms across the nation.
NY Times:
“People were put into loans they did not understand, could not afford and could not get out of,” Ms. Madigan said. “This mounting disaster has had an impact on individual homeowners statewide and is having an impact on the global economy. It is all from the greed of people like Angelo Mozilo.”
Read the rest of the story from the NY Times
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Jun 25th, 2008 at 11:02 am
[...] loan article: Countrywide Accused of Selling Defective Loans One of my long standing points of view on the mortgage and housing crisis is that these creative [...]