The AP (2/3) reported California reached a $6.5 million agreement with former executives at Countrywide Financial Corp. to settle a predatory lending lawsuit. The state's 2008 suit claimed Countrywide "lured borrowers with low 'teaser' rates on adjustable rate loans. Loan officers didn't tell borrowers that the rates would jump, that prepayments would be penalized, and the total loan costs would skyrocket, even if they made additional payments." The $6.5 million settlement will finance a fund to "provide restitution, mortgage modifications and relocation assistance for foreclosed homeowners, plus money for state and local agencies to prosecute mortgage fraud."
The National Law Journal (2/3, Bronstad) reported, "The recovery added to the $3.5 billion previously obtained through a 2008 agreement with Countrywide and the other corporate defendants." The office of Attorney General Kamala Harris reported "Since the first settlement, Countrywide has made modifications worth more than $1.3 billion on loans to California borrowers and has paid $28 million in cash to those who lost their homes in foreclosure."