- May 25, 2002
- Professional Status
- Certified Residential Appraiser
Countrywide Subpoenaed by Illinois
The Illinois attorney general is investigating the home loan unit of Countrywide Financial as part of the state’s expanding inquiry into dubious lending practices that have trapped borrowers in high-cost mortgages they can no longer afford.
Lisa Madigan, the attorney general, has subpoenaed documents from Countrywide relating to its loan origination practices, a person briefed on the matter said. Rick Simon, a Countrywide spokesman, said the company was cooperating with the investigation but declined to comment further.
The inquiry follows an investigation by Ms. Madigan’s office into One Source Mortgage, a Chicago mortgage broker that recently closed its doors. Ms. Madigan sued One Source on Nov. 27, contending that the company misled borrowers by promising low rates on mortgages without advising them that their payments would jump sharply shortly after the loans were made. Countrywide was One Source’s primary lender, according to the lawsuit.
Countrywide, the nation’s largest mortgage lender and loan servicer, is coming under increased scrutiny as the home loan crisis deepens. In addition to the Illinois investigation, the company is also fielding inquiries from the Securities and Exchange Commission about significant stock trades made by Angelo R. Mozilo, the chief executive, before Countrywide’s stock plummeted this year.
The United States trustee, which oversees the bankruptcy court system, is investigating Countrywide’s actions in two cases involving borrowers in South Florida whose loans were serviced by the company. The trustee is trying to determine if the company’s conduct in those cases represents abuses of the bankruptcy system.