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State files suit against mortgage lender

January 1, 2008
Indiana Attorney General Steve Carter has filed a lawsuit against mortgage lender Countrywide Home Loans Inc. for questionable practices, making Indiana the fifth state to take action against the largest lender in the country. The suit, No. 76C01-0808-PL-652, was mailed to Steuben Circuit Court Aug. 22 and filed the same day.

The suit, which includes Countrywide's parent company, Countrywide Financial Corporation, alleges the company engaged in deceptive and misleading practices that put borrowers in potentially risky and costly loans.

Carter's investigation of the company showed homeowners were misled about some terms of their loans including pre-payment penalty terms and the time period in which interest rates would be recalculated.

The state wants the court to order Countrywide to end the deceptive practices listed in the suit, void the prepayment penalties on Countrywide originated loans, and void any portion of the Countrywide originated loans that resulted from deceptive acts.

The state is also seeking civil penalties of up to $15,500 per violation in addition to investigative costs and consumer restitution. The penalties are allowed under Indiana's Home Loan Practices Act, Indiana Code Section 24-9-8, and Indiana's Deceptive Consumer Sales Act, I.C. Section 24-5-0.5.

California, Connecticut, Florida, and Illinois also have pending actions against the mortgage company.
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