HARTFORD – Connecticut residents fleeced by one of the top ten sub-prime lender will receive more than $3,000 each for being a victim of the company’s abusive lending practices.
Attorney Richard Blumenthal at press conference today announced that Countrywide Financial Corporation on Friday mailed payments to 370 Connecticut residents. Each resident will get up to $3,452.54, Blumenthal said.
The payments are part of an $8.4 billion, nation-wide settlement with Countrywide. Connecticut’s slice of that $113 million agreement is $1.27 million.
Countrywide is one of the top ten subprime lenders that contributed to the housing crisis, which led to millions of foreclosures, helping to sink the economy deeper into an already recession.
And in the meantime, they crushed dreams of many.
” Countrywide turned the American dream of homeownership into a nightmare for thousands of home buyers and families,” Blumenthal said.
Another lender accused of doing just that was Wells Fargo. This lawsuit accuses the bank of unfair and misleading lending practices to minority communities and what’s often known as “reverse red-lining.”
In January of 2008, the city of Baltimore sued Wells Fargo for a range of deceptive practices to push high-interest, subprime loans onto African Americans in Baltimore and in Maryland suburbs, leading hundreds into foreclosure. In July, the Illinois Attorney General Lisa Madigan sued Wells Fargo for having, quote, “transformed our cities into ground zero for subprime lending.” DemocracyNow highlighted this story last August.
In August 2008 Blumenthal was among several state attorneys general to file suit against Countrywide, claiming that the loan company used “oppressive, unethical, immoral and unscrupulous” practices.
In October 2008 Bank of America, which bought Countrywide, settled in June 2009, Blumenthal said.
The money sent out went to consumers who have mortgages that have been foreclosed, or is in serious default. And the first mortgage payments must have been due between Jan. 1, 2004 and Dec. 31, 2007.
Other aspects of the settlement include loan modifications and another type of restiution, Blumenthal said. He warns that some people who receive payments, however, may still end up losing their house.