San Diego City Attorney Michael Aguirre has filed a civil complaint against Countrywide Financial, alleging that the former top home loan lender committed consumer lending fraud.
Specifically, Countrywide has been accused of making loans based on the foreclosure or liquidation value of a borrower’s collateral, instead of their actual ability to repay the loan.
Additionally, the suit notes that Countrywide induced borrowers to serially refinance in order to collect excessive mortgage points and loan origination fees, and engaged in mortgage fraud and/or deception to up its share of the national mortgage market.
The legal action calls for injunctive relief and civil penalties, as well as a foreclosure moratorium on all owner-occupied properties tied to subprime loans.
“We are asking a court to prevent Countrywide from initiating or advancing any foreclosure on any residential sub-prime mortgages involving properties which are owner occupied in the City of San Diego,” said Aguirre, in a statement.
“We believe these borrowers are victims of fraud and were roped into unconventional sub-prime loans when they probably could have qualified for a conventional fixed-rate mortgage.”
This company will not go away quietly, you can be assured of that…