Countrywide sued by West Virginia over mortgages
NEW YORK (Reuters) - Countrywide Financial Corp, now owned by Bank of America Corp (BAC.N), has been sued by West Virginia, which accused the mortgage lender of making risky and costly loans to consumers who couldn't afford them.
Darrell McGraw, the state's attorney general, announced the lawsuit against Countrywide and its co-founder and former chief executive, Angelo Mozilo, on Tuesday.
West Virginia is at least the fifth U.S. state to sue Countrywide over its business practices, joining California, Connecticut, Florida and Illinois. Another state, Washington, has threatened to revoke Countrywide's lending license.
Countrywide had been the largest U.S. mortgage lender before Bank of America bought it on July 1 for $2.5 billion.
A copy of the lawsuit was not immediately available.
Bank of America did not immediately return a call seeking comment. The Charlotte, North Carolina-based bank has repeatedly said it is committed to responsible lending practices. Countrywide was based in Calabasas, California.
McGraw accused Countrywide of making "unaffordable and unconscionable" home loans to West Virginia consumers.
He said the lender improperly enticed consumers with loans that required no down payments, as well as with adjustable-rate mortgages that carried low initial "teaser" rates but which later reset at much higher rates.
The attorney general also said Countrywide inflated appraisals, saddling consumers with home loans that they were later unable to refinance.
(Reporting by Jonathan Stempel; Editing by Lisa Von Ahn)
