Calif. Settles Predatory Lending Lawsuit Against Countrywide

LOS ANGELES (AP) — The state of California has settled a predatory lending lawsuit against former Countrywide Financial Corp. CEO Angelo Mozilo and President David Sambol.

The settlement filed Wednesday in Los Angeles Superior Court says Countrywide will pay $6.5 million to a Foreclosure Crisis Relief Fund.

Attorney General Kamala Harris says the fund will provide restitution and relocation assistance for foreclosed homeowners, loan modification services and money for local agencies to prosecute mortgage fraud.

The state sued Countrywide, Mozilo and Sambol in June 2008 alleging that the company lured borrowers with low “teaser” rates on adjustable-rate loans. Loan officers didn’t explain the details of the loans and thousands of homeowners ended up in default and foreclosure.

The executives left the company when Bank of America Corp. bought it in July 2008.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)

  • John

    You have got to be kidding, these people pocketed $100 Million each and get fined $6.5 Million ?? they leave more than that as a tip in a resturant. What a waste of time. Ask the people that lost their homes and had to uproot their families if they think this is fair !!

    • Mom2d

      Really, because people didnt do their homework, before entering into anything of this nature. Please, when are people gonna quit playing the victim role. They (borrowers) took a risk and it didnt play out !. Im sick of americans not taking responsibility for their own actions.. B S

      • mike

        mom2d when the loan person and the notary dont tell you about the hidden aspects of your loan when they go over it with you some people including myself didnt realize it was an a.r.m loan untill it was to late.i was told my interest rate which was ok and found out much later ir was an a.r.m loan something i had never been in ever before and when i found out to much time had past and i was stuck like many others with the loan you people dont know that people were lied to and signed loans they did not and were not told were a.r.m loan untill it was to late,

    • Gryphon

      You are so correct, John. The fine should have been 50 t0 60 times this amount at the very minimum.

  • john

    California is so freakin stupid. you really think 6.5 miiilion send a message. Prison send a message. Why don’t the people of California make the deal. Instead of the good ol buddy club. everone still suffers, these guy get to live it up.

  • Robbie

    Mom2d: Some people did their homework but were straight out lied to by the mortgage broker and then when countrywide bought the loan, they would not fix the lie. It was NOT always the Borrowers fault.

  • Robbie

    These people wont let me name the $%# jerk of a mortgage broker who lied to me. These WHITE COLLAR criminals need to be in a 5X8 cell with Bubba.

  • DavidR

    Robbie—-I totally agree.

  • Veronica Salazar

    I used to work for Countrywide, and yes, they made lots of moola, the fine should have been more, I agree with John. As for Mom2d, you were probably a broker who tied them into that type of loan. Yes, jail time would have taught more people a lesson, but with all that stuff going around, Im sure Mozilo hasn’t heard the end of it.

  • Mad Xema

    I will go to my doctor when I am feeling ill, I will speak to my dentist when my tooth hurts, I will consult a person of the cloth when I need spiritual healing and I will be damned for listening to my “broker”, “real estate agent” and “the bank” for presenting themselves as respresentatives for me, who mind you benefit quite handsomely for selling me a house, that if they did not know, it is now proven, that the wall street did know of the “toxic mortgages”. These people were pushed to “hand out” loans on the belief that once the a.r.m. loans were up one would refinance on a much higher valued home. Wall street, paulson, greenspan, bernanke, all were aware of this. Shame on them for preying on the American Dream which now is the American Nightmare

  • Richard

    Well I owe $600k on my house that is now worth all of $200k, so their six million dollars will cover my loss right?

  • Kent Malonson

    Don’t even get me started on this. I, like many American, did my homework and put my faith int the “professionals.” Mom2d I am not playing the victim, just picking up the pieces and moving on, but I will NEVER believe a broker, banker, or title company again. I agree with the comment above, that you were probably one of the those brokers, etc. to make a comment like you did. Or else you had some other golden opportunity so you did not have the “pleasure” of experiencing this nightmare.

  • Wayne

    White collar criminals get a slap on the wrist. This fine is a joke. Countrywide made hundreds of millions of dollars on these failed loans. The CEO’s of these companies walked away with 10’s of millions each. Who says crime doesn’t pay? As long as it hurts the general public and is valued in the hundred’s of millions. Tell me , where is the deterance for this type of fraud?

  • Andreas chrysanthopoulos

    These people are criminals.because of their intentionally bad decisions,millions Of. Homeowners have already lost our homes.put them behind bars and get back all the money. The fine is a joke, really. As a matter of fact, it looks very suspicious to me. I would like to know myself what actually happened …behind the scenes. I myself want to know whatactually took place….under the table. I am kindly asking the calif.state attorney general to investigate this case. Thanks

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