Countrywide Financial Corporation, the nation's biggest mortgage lender, has been sued by the attorneys general of California and Illinois, who charge that the company engaged in false advertising and deceptive lending practices that led to thousands of foreclosures.
On Wednesday, Illinois Attorney General Lisa Madigan announced the filing of a lawsuit against Countrywide, alleging that the company engaged in "a single-minded quest to dominate the nation's mortgage market" by selling expensive and risky loans products to home buyers who could not afford them, causing a "skyrocketing number of home foreclosures" in the state. Also on Wednesday, the office of California Attorney General Edmund G. Brown Jr. announced that it was suing Countrywide and its top two corporate officers for deceptive advertising and unfair business practices, claiming that the mortgage lender pushed homeowners into expensive and risky loans so that the company could sell more loans to third-party investors. The Chicago Tribune reports that "[m]ore states are likely to jump on the bandwagon as public officials attempt to assign blame and make hay from the mortgage industry implosion that has led to record foreclosures and rocked the U.S. economy."