June 25, 2008

From the New York Times:

The Illinois attorney general is suing Countrywide Financial, the troubled mortgage lender, and Angelo R. Mozilo, its chief executive, contending that the company and its executives defrauded borrowers in the state by selling them costly and defective loans that quickly went into foreclosure.

The lawsuit, which is expected to be filed on Wednesday in Illinois state court, accused Countrywide and Mr. Mozilo of relaxing underwriting standards, structuring loans with risky features, and misleading consumers with hidden fees and fake marketing claims, like its heavily advertised "no closing costs loan."

The suit will be filed in Cook County Court. More from The Wall Street Journal, Reuters, and Portfolio, "Angelo's Ashes." The Conde Nast publication broke the stories about favorable mortgages to Sens. Chris Dodd (D-CT) and Kent Conrad (D-ND).

In March, AG Madigan subpoenaed Countrywide and Wells Fargo "to determine whether the lenders unfairly steered African American and Latino borrowers into higher cost or otherwise inappropriate home loans in violation of fair lending and civil rights laws." They should have just gotten on the phone with Angelo.