LOS ANGELES (Reuters) - California Attorney General Jerry Brown sued Countrywide Financial Corpand two top officers on Wednesday to stop the mortgage loan company from allegedly perpetrating a scheme to "mass produce loans for sale on the secondary market."
Countrywide made one in six U.S. mortgage loans last year and is closely associated with the collapsed housing bubble.
Brown's office said the lawsuit, filed in Los Angeles Superior Court, also seeks unspecified restitution for homeowners who were allegedly conned into risky, costly loans they did not understand by brokers desperate to meet unrealistic production goals.
We do know that at some point the product that mortgage companies were selling essentially flipped. They went from providing mortgages to people, to providing bundled mortgage securities to Wall Street. While it's quite possible that there was actual fraud going on with respect to mortgage borrowers, the greater fraud might have been perpetrated against the investors which eagerly bought up their chunks of big shitpile. Obviously I sympathize less with the latter who are paid big money to, you know, have some idea what they're doing.