As Riverside County loan modification lawyers, we have continued to follow the downfall of former mortgage lender Countrywide Financial. Based in Calabasas, Countrywide was a leading writer of subprime and exotic mortgages until the housing crash, when it nearly collapsed before Bank of America bought it. Since then, it has settled several lawsuits claiming it followed unethical lending practices related to subprime loans. On May 7, Reuters reported that Bank of America's Countrywide division has also settled a lawsuit by investors, who claimed the company deceived them about the level of risk in the loans it issued. The case, in Los Angeles federal trial court, was slated for trial in August.
The plaintiffs were led by the New York State Common Retirement Fund, one of several pension funds involved. They said they were deceived by Countrywide's public statements about its risks as a lender, including public assurances that it would survive the housing downturn. In fact, it collapsed in late 2007, setting the stage for Bank of America's takeover announcement in January of 2008. During the height of the boom, Countrywide made one out of every six housing loans, but relied heavily on subprime and option adjustable-rate mortgages that carried high risks but allowed fast growth. Countrywide admits no wrongdoing in the settlement, which would compel payments of $600 million from Countrywide and another $24 million from KPMG LLC, its auditor. This would be the thirteenth largest class-action settlement since a 1995 overhaul if it is approved.
Our Temple City loan modification attorneys don't work in securities law -- we work with homeowners who need help negotiating a fair and timely loan workout. But because we keep an eye on California real estate matters, we're not surprised that investors were successful in this case. Former Countrywide CEO Angelo Mozilo and other executives are defendants in a separate securities lawsuit brought by the SEC, which accuses them of insider trading as well as misleading statements about the company's help. In particular, Mozilo is accused of admitting in a private email that Countrywide was "flying blind" about loan safety, then unloading stock options in 2006 and 2007, while the company's stock still had value. This is the same profit-driven behavior that caused Countrywide to sell loans to people they knew couldn't pay them back, target minorities for subprime loans, misinform borrowers and engage in other illegal, unethical practices.
Howard Law PC helps borrowers unravel financial and personal messes caused by bad loans and bad behavior by lenders. In our experience as Placentia loan modification lawyers, most people facing default and foreclosure in 2010 are not victims of predatory lending practices like those described above -- many are simply stretched too thin by the recession. But when lenders fail to follow through on promises, repeatedly lose paperwork or engage in other seemingly incompetent practices, they can cause serious harm to homeowners desperate for a loan modification that allows them to keep their homes and investments. We find that many lenders change their tunes when we get involved, in part because they know we can and will sue them for gross negligence in handling our clients' affairs. Where appropriate, we can also go after lenders who break predatory lending laws.
If you're fighting for a loan modification, but your lender has repeatedly ignored or mishandled your case, Anaheim-based Howard Law can help you fight back. To set up a free consultation or learn more, call us today at 1-800-872-5925 or send us a message through our website.