California Accuses Countrywide Of Being In The Mortgage Lending Business

Author:
John Carney
Updated:
Jan 14, 2019
Original:
Jun 25, 2008

California's attorney general has filed a lawsuit accusing mortgage lender Countrywide of viewing "borrowers as nothing more than the means for producing more loans." Even worse, they exploited "the American dream of homeownership and then sold its mortgages for huge profits on the secondary market," California attorney general Edmund G. Brown said in a statement.
Let's just handcuff the invisible hand and be done with it.
Also, here's Larry Ribstein on the Illinois suit, which similarly accuses Countrywide of "allegedly making profits from loaning money even if the money was not repaid."

California Files Lawsuit Saying Countrywide Used Deceptive Ads [Wall Street Journal]

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In June 2008, Countrywide founder and CEO Angelo Mozilo stood before a group of CFC shareholders and, through salty tears, told them that Bank of America would "reap the benefits of what we have sowed." He wasn't kidding, and in the 4+ years since Ken Lewis paid $4 billion for the place, BofA has had the pleasure of ponying up an additional $40 billion (and counting) in write-downs and legal fees associated with cleaning up Countrywide's messes, while CEO Brian Moynihan has publicly described the acquisition as an albatross around his neck. Additionally, Ang Moz forked over $67.5 million in 2010 to "resolve SEC claims that he misled investors," and separately, there has been talk by some that Countrywide contributed in no small way to the worst financial crisis since the Great Depression. In light of all that, does Ang Moz, have any regrets about the way his company was run? Not a fucking one and if he had to do it all over? He wouldn't change a thing.

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