10 Aug Connecticut Files Suit Against Countrywide Mortgage
For the second time in a week, Connecticut’s Attorney General has taken a pro-consumer case to court. Earlier this week, the state moved to shut down an unlicensed collection agency. The state has now filed suit against Countrywide Financial Corp. alleging that the company made inappropriate and unaffordable mortgage loans to borrowers and then collected excessive fees in bankruptcy cases from borrowers who had defaulted on loans.
Connecticut has now joined the states of Florida, California and Illinois as well as numerous other municipalities, government agencies, and investors in laying blame for the current credit crisis at Countrywide’s feet. Under Connecticut law, the state could recover as much as $5,000.00 for each violation of consumer protection statutes and $100.000.00 for each violation of the state’s banking regulations. The total recovery could amount to hundreds of millions of dollars.
Countrywide is no stranger to Connecticut as it was recently revealed that Senator Chris Dodd who is chairman of the Senate Banking Committee received a favorable loan from Countrywide as one of the “Friends of Angelo”, Countrywide’s chief executive officer, Angelo Mozillo.