Indiana Attorney General Steve Carter said Sunday that he had become the latest state official to file suit against Countrywide Financial Corp. alleging the nation's biggest mortgage lender engaged in deceptive and misleading practices that left borrowers with potentially risky and costly loans.
Carter said his investigation found that Countrywide, acquired in July by Charlotte-based Bank of America Corp., found homeowners were misled about the terms of loans, including prepayment penalties and the period that interest rates reset.
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“A pattern of misleading and questionable practices has emerged from our investigation into home loans,” said Carter. “These unfair lending practices may have harmed thousands of people and, in turn, negatively affected our communities and neighborhoods throughout the state.”
Indiana joins California, Connecticut, Florida, Illinois, Washington and New Mexico in taking action against Countrywide.
Bank of America spokeswoman Shirley Norton said the company could not comment on pending litigation but will respond to the suit in “due course.” Since taking over Countrywide, the bank has undertaken a detailed review of Countrywide operations and plans to carry over “practices that established Bank of America's positive reputation and record in home lending,” she said.