News for June

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Madigans lawsuit is the result of a two year investigation of Countrywides lending policies and practices that were in place throughout the years directly previous the cave in of the housing market. The Attorney General issued a fair lending subpoena to Countrywide in March 2008, after a Chicago Reporter study of federally collected loan lending data for the Chicago area found that, in 2006, Countrywide Financial Corporation sold higher cost loans to 50. 9 percent of its African American borrowers and 33. 8 percent of its Latino borrowers, while only 19.

5 % of the companys white borrowers bought high cost loans. The Attorney General extra alleges that Countrywide did not institute an enough system for instantly referring eligible borrowers from subprime to prime. Although the company added an Uplift protocol to its underwriting system in 2002 to supposedly avoid prime eligible borrowers from being placed into subprime loans, Madigan alleges that the Uplift program failed as a shield as it trusted a combination of automatic underwriting and human discretion. When interviewed by Madigans office, former Countrywide personnel and brokers suggested that they’d rarely or never seen subprime loans uplifted to prime. The defendants are the 16 sham companies API Trade LLC, ARA Auto Parts Trading LLC, Bend Transfer Services LLC, B Texas European LLC, CBTC LLC, CMG Global LLC, Confident Incorporation, HDPL Trade LLC, Hometown Homebuyers LLC, IAS Group LLC, IHC Trade LLC, MZ Services LLC, New World Enterprizes LLC, Parts Imports LLC, SMI Imports LLC, SVT Services LLC and a number of persons who are unknown to the agency at this time.

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The FTC charged them with making unauthorized fees to consumers bank cards in violation of Section 5 of the FTC Act. The court froze the defendants assets and ordered them to forestall operating, pending final decision of the case.