San Diego City Attorney Michael Aguirre has filed a civil complaint in San Diego Superior Court against Countrywide Financial Corp. alleging that the lending institution engaged in a ‘pattern of unlawful, fraudulent or unfair predatory real estate lending practices’ that has caused numerous San Diego residents ‘to be in jeopardy of losing their homes through foreclosures.’ The legal action also calls for injunctive relief and civil penalties.
‘We are asking a court to prevent Countrywide from initiating or advancing any foreclosure on any residential subprime mortgages involving properties which are owner-occupied in the City of San Diego,’ says Aguirre. ‘We believe these borrowers are victims of fraud and were roped into unconventional subprime loans when they probably could have qualified for a conventional fixed-rate mortgage.’
The civil lawsuit was filed by the Consumer and Environmental Protection Unit of the San Diego City Attorney's office. The complaint alleges that Countrywide's unlawful lending practices directed against San Diego home purchasers and homeowners involved one of the following elements:
- making loans based predominantly on the foreclosure or liquidation value of a borrower's collateral rather than on the borrower's ability to repay the mortgage according to its terms,
- inducing the borrower to repeatedly refinance a loan in order to charge high points and fees each time the loan is refinanced, or
- engaging in fraud or deception to conceal the true nature of the mortgage loan obligation.
The lawsuit further alleges that the goal of Countrywide's unlawful, fraudulent or unfair predatory lending practices was to increase the company's share of the national mortgage market by mass-producing loans for sale on the secondary market.
Source: Office Of San Diego City Attorney Michael Aguirre