Illinois AG takes aim at Countrywide

The lawsuit against Countrywide Financial Corp. was filed in Cook County on Wednesday. That's the same day shareholders from the California-based company approved a takeover by Bank of America.

It also comes as the California attorney general sued Countrywide, claiming the company misled borrowers.

The Illinois lawsuit was filed after the state subpoenaed documents from Countrywide last fall when the number of foreclosures nationwide began to skyrocket. It argues that Countrywide engaged in quote 'unfair and deceptive' practices in an effort to get people to apply for mortgages they could not afford. Those practices allegedly included loans with risky features that mislead customers with hidden fees and false marketing claims, such as a 'no closing costs loan.'

Illinois Attorney General Lisa Madigan says the company promoted high-risk loans that contributed to the high number of foreclosures in Illinois.

"Much of this comes from Countrywide's greed and their desire to dominate the marketplace. Unfortunately, this came at a very steep price to Illinois homeowners. Our investigation clearly revealed that Countrywide cared far more about its market domination than it did about homeowners staying in their homes. Countrywide pushed to sell more and more loans, clearly without regard to a borrower's ability to make their loan payments. The company's unfair lending practices have harmed thousands of Illinois homeowners who have been placed in risky Countrywide loans," said Madigan.

A Countrywide spokeswoman declined to comment on the litigation, which seeks restitution for consumers.

Madigan wants the attorney general's office to have 90 days to review all Countrywide loans.

Countrywide was once the nation's top mortgage lender.

Since the attorney general created a mortgage hotline in March, they have gotten 900 calls. Two hundred of those calls were about Countrywide mortgages.

At one time, Countrywide had 100 branches locally. The company made 94,000 loans to Illinois consumers.

Locally, a Chicago report study found Countrywide was the largest seller of high-cost or subprime loans.

Melissa White received one of those loans. The single mom and teacher looked at refinancing her suburban home to help pay medical bills. But she says instead of the help Countrywide offered, she ended up in worse shape financially.

"This isn't right. It's not fair. I can't even get someone to talk to. I tried on my own. And no one will listen," said White.

White was able to negotiate a loan she could afford only with the help of the Attorney General's Office.

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The Associated Press contributed to this report. All rights reserved.

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