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California attorney general sues Countrywide Financial

Countrywide Financial Corp. and its chief executive, Angelo Mozilo, were sued today by California Atty. Gen. Jerry Brown, who accused them of forcing thousands of Californians into foreclosure by deceptively marketing risky adjustable-rate mortgages to borrowers who didn’t understand that their monthly payments would one day “explode.” In a complaint filed in Los Angeles County Superior Court, Brown alleges that Countrywide and its top executives, beginning in 2004, plotted to loosen or ignore lending standards so they could make more sub-prime mortgages and other adjustable-rate loans that were promoted by emphasizing low initial rates. By deceiving borrowers about the risks of these loans, Countrywide’s top executives sought to double the lender’s share of the national mortgage market to 30%, mass-producing loans that could be sold off and transformed into complex bonds, the suit said. For the full story visit http://www.latimes.com/business/la-fi-country26-2008jun26,0,4864584.story

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