Indiana Attorney General Steve Carter has filed a lawsuit against Countrywide Home Loans Inc., and its parent company, Countrywide Financial Corp. Carter alleges that Countrywide engaged in deceptive and misleading practices that led to borrowers obtaining potentially risky and costly loans. The lawsuit has been filed in Steuben County Court.
‘A pattern of misleading and questionable practices has emerged from our investigation into home loans,’ states Carter. ‘These unfair lending practices may have harmed thousands of people and, in turn, negatively affected our communities and neighborhoods throughout the state.’
Carter's investigation revealed that homeowners were misled when they were told one thing about their loans while signing contracts that indicated other terms. The most common misrepresentations uncovered to date have been on prepayment penalty terms, and the time period in which interest rates would be recalculated.
According to the attorney general's office, Countrywide also utilized no-documentation loans where a borrower's income was misrepresented on the loan documents. In one case, a person's income was stated as $14,000 per month when, in actuality, the income was approximately $3,000 per month.
Carter is requesting that the court order Countrywide to end the deceptive practices listed, void the prepayment penalties on Countrywide originated loans and void any portion of the Countrywide originated loans resulting from deceptive acts.
Source: Office Of Indiana Attorney General Steve Carter