Connecticut Is Latest to Sue Countrywide

Make that Illinois, Florida, California, and Connecticut.

From the Associated Press:

Connecticut sued Countrywide Financial Corp. on Wednesday, becoming the latest state to take the mortgage lender to court over its lending practices.

State Attorney General Richard Blumenthal alleges that Countrywide misled borrowers into taking on risky home loans they could not afford. California, Illinois, Florida, and the city of San Diego have made similar claims in their own lawsuits against the company.

Countrywide, once the nation's largest mortgage originator before a jump in bad loans ravished its business, has been blamed for helping to cause the mortgage meltdown.

The lawsuit was filed in Hartford Superior Court on Wednesday, and the company was served with the legal papers earlier in the day, Blumenthal said.

Blumenthal's office and Connecticut's Departments of Banking and Consumer Protection are the plaintiffs in the lawsuit. They're alleging that the company violated state consumer protection and banking laws and charged unjustified fees to homeowners who defaulted.

"Countrywide conned homeowners into mortgages they simply could not afford," Blumenthal said, adding that hundreds, possibly thousands, of Connecticut homeowners were affected. He said he does not yet have a precise number.

Countrywide, based in Calabasas, Calif., said in a statement Wednesday that it cannot comment on pending litigation.

But the company noted that it had previously announced its commitment to responsible lending practices, including an effort to keep an estimated 265,000 customers in their homes by modifying at least $40 billion in troubled mortgages.

"We will respond to the AG in due course," the company said, referring to Blumenthal.