City Attorney Sues Countrywide To Stop Foreclosures
9:16 AM, Jul 23, 2008
City Attorney Michael Aguirre filed a lawsuit against Countrywide Financial Corp. Wednesday, alleging the mortgage giant engaged in unlawful lending practices that led to widespread foreclosures in San Diego.The lawsuit, which also names Countrywide parent company Bank of America, seeks an injunction to stop further lender foreclosures and calls for civil penalties of up to $100,000 for each alleged violation.In a statement, Countrywide representatives said they had not yet received the complaint, but said since Bank of America took over the company earlier this month, a "detailed review" of its operations is being conducted."We are passionate about helping customers purchase a home with the right product for them and helping customers sustain homeownership," the statement read."We have made this clear in our previously announced commitments," the statement continued. "We are working hard to combine our two companies, and are confident we will be recognized as a leader in responsible lending practices."The lawsuit accuses Calabasas-based Countrywide of engaging in a "pattern of unlawful, fraudulent or unfair predatory real estate lending practices causing victims of such behavior, in the city of San Diego, to lose or be in jeopardy of losing their homes through foreclosure.""We are asking a court to prevent Countrywide from initiating or advancing any foreclosure on any residential sub-prime mortgages involving properties which are occupied in the city of San Diego," Aguirre said."We believe these borrowers are victims of fraud and were roped into unconventional sub-prime loans when they probably could have qualified for a conventional fixed-rate mortgage," he said.According to La Jolla-based DataQuick Information Systems, lenders sent default notices to 9,519 homeowners in San Diego County in the second quarter. That's up from 4,383 during the same period last year -- a 117 percent increase.Outside a dilapidated house in San Diego's Skyline neighborhood, Aguirre said he is seeking to "stop the spread of this foreclosure disease.""We are situated in front of a house that is the unfortunate consequence of a national practice of unlawful, fraudulent and unfair lending scheme," the city attorney said.