AG accuses Countrywide of deception

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Indiana Attorney General Steve Carter has filed a lawsuit in Steuben County Court against Countrywide Home Loans Inc., alleging that the nation’s largest mortgage lender engaged in deceptive practices that led borrowers to obtain costly and potentially risky loans.

He joins attorneys general from four other states in taking action against Calabasas, Calif.-based Countrywide this year. Legal action is pending in California, Connecticut, Florida, and Illinois. Washington and New Mexico have taken separate actions against the mortgage giant.

Carter alleges in the lawsuit that Countrywide:

-Provided financial incentive for employees and loan brokers to sell loans with potentially risky features.

-Made misleading representations or omissions about loan terms, interest rate charges and the mechanics of adjustable-rate loans.

-Misled borrowers about prepayment penalties; and

-Inflated or fabricated a borrower’s income on a loan application, allowing a borrower to be approved for loans he would have failed to qualify for otherwise.

Carter asked the court to order Countrywide to end the deceptive practices and void any portion of the loans it originated using the misleading acts.

The state also is seeking civil penalties of up to $15,500 per violation, as well as investigative costs and consumer restitution in an amount to be determined at trial.

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