Another State Moves on the Mortgage Crisis
Add West Virginia to the list of states suing Countrywide Financial Corp., alleging its loans were predatory and harmful to consumers, Housing Wire reports. California, Connecticut, Florida, Illinois, and the city of San Diego already have filed similar suits against the troubled firm, which once claimed the title of the nation’s top subprime lender but has since been bought by Bank of America. Now West Virginia is stepping in, saying that foreclosures drag down home values for everyone, and blaming Countrywide loans for the problem.
From West Virginia State Attorney General Darrell McGraw:
“Countrywide made loans to West Virginia consumers on terms that were unaffordable and unconscionable. These loans exposed consumers to foreclosure and loss of their homes. Countrywide also used unfair and deceptive acts or practices to make loans and service loans.”
Because Congress took so long to approve a mortgage rescue plan, states have moved aggressively to address the foreclosure crisis. States are not being shy about going after big lenders directly, fingering them for loans they say were predatory and unfair, and trying to force them to pay for it. What’s interesting to watch is whether lenders will seek protection or help from the federal government if the suits continue.