Calif. Settles Predatory Lending Lawsuit Against Countrywide
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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.)