GARY | Indiana has filed a lawsuit against the country's largest mortgage lender, Indiana Attorney General Steve Carter announced Monday.
Carter alleges Countrywide Home Loans, Inc., and its parent company, Countrywide Financial Corporation, deceived and misled borrowers into obtaining potentially risky and costly loans. The lawsuit has been filed in Steuben County Court, his office reported.
Three consumers -- one each from Steuben, Marion and Hamilton counties -- are included in the suit, Carter said Monday during a news conference at the Gary Jet Center.
Those homeowners have not lost their property as a result of the alleged incidents, he added.
"They've hung in there, but they've been negatively impacted" Carter said.
Indiana joins Florida, California, Connecticut and Illinois in filing suits against Countrywide Financial.
A representative from Bank of America, which acquired Countrywide Financial in July, could not be reached Monday for comment.
The Indiana suit alleges homeowners were misled when they were told one thing about their loans while signing contracts that indicated other terms.
The most common misrepresentations uncovered to date have pertained to prepayment penalty terms and the time period in which interest rates would be recalculated, Carter's office reported.
The company also used no-documentation loans in which borrowers' incomes were misrepresented on loan documents, Carter's investigation concluded. In one case, a person's income was stated as $14,000 per month when it really was about $3,000 per month, Carter said.
Carter said many more people may join the lawsuit as his office's investigations continue.
Indiana consumers should review their loan contracts to ensure the terms match what they were told, Carter warned Monday.
If consumers believe loan terms are not what they initially believed, they are asked to complete a consumer complaint with the attorney general's office at www.IndianaConsumer.com.
More information and a frequently asked questions page also is available on the site.
