Florida Subpoenas Countrywide for Information on Mortgages
TALLAHASSEE, Fla. (AP) -- Florida's attorney general is investigating Countrywide Financial Corp., a beleaguered California-based mortgage lender, for possible unfair and deceptive business practices related to its home loans.
The subpoena, dated Jan. 17, directs Countrywide to provide documents and other information describing procedures used to determine whether borrowers qualify for subprime loans, those for people with shaky credit.
The state also wants information on how Countrywide credited borrowers' payments any time after January 2005. It also asks for documents that track applications of borrowers' payments to bankruptcy debt and a description of fees charged to mortgage holders during the same period.
"We've had a number of complaints about Countrywide, as well as other mortgage companies in the subprime arena," Attorney General Bill McCollum told reporters Thursday. "(The complaints involve) how some of their business was conducted in terms of marketing and in terms of advertising."
McCollum is also interested in how Countrywide conducts itself with borrowers who find themselves in trouble. He said he was interested in comments made by several bankruptcy judges concerning how the company treats people seeking relief.
Countrywide said it received the subpoena "and will cooperate fully with the State's investigation," but declined further comment.
The attorney general's office started a mortgage fraud hot line last year. It has received about 150 complaints on Countrywide.
Countrywide has until Feb. 11 to provide the information.
Attorneys general in Illinois and California are conducting similar investigations.
McCollum said he is also investigating other mortgage companies but has not filed any other subpoenas yet.
Countrywide, like many in the mortgage industry, has suffered under the weight of the subprime fallout as thousands of customers default on home loans. Many experts criticize companies like Countrywide for relaxing lending standards and contributing to the meltdown.
Earlier this month, Bank of America Corp. agreed to pay $4.1 billion in stock for Countrywide, a Calabasas, Calif.-based mortgage lender.
SRM Global Fund, which owns a 5.2 percent stake in Countrywide, said the acquisition is a bad deal for shareholders, according to a regulatory filing Thursday. The Cayman Islands-based private investment fund said it plans to vote against the takeover.
In the Securities and Exchange Commission filing, the hedge fund said the acquisition deal does not provide sufficient value to shareholders, based on publicly available information.
Countrywide said it's preparing materials and meeting requirements set forth in securities regulations. It said information about the deal will be available to the public upon filing with the Securities and Exchange Commission.
Countrywide shares rose 44 cents at $6.94 in afternoon trading.
Associated Press writers David Royse in Tallahassee and Alex Veiga in Los Angeles contributed to this report.