Illinois Joins Legal Attacks on Countrywide Financial

During the housing boom of 2001 through 2006, Countrywide Financial Corp. (www.countrywide.com) could do little wrong. As the country’s biggest mortgage lender, Countrywide kept growing and growing.

Today, the company is in serious trouble, with critics placing a large share of the blame for the country’s mortgage mess on its lending practices. These critics say that Countrywide gave out too many bad loans, lending mortgage money to buyers whose credit histories, income levels and debt should have prevented them from qualifying for home financing.

Several states have since filed lawsuits against Countrywide. Illinois is now no exception. Earlier this month, Illinois Atty. Gen. Lisa Madigan’s office filed its own lawsuit against the company, claming that the lender used “unfair and deceptive” practices to encourage homeowners to apply for risky mortgages that they could not afford.

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This situation doesn’t help anyone. Mortgage lenders like Countrywide certainly made mistakes during the housing boom. But they also helped spur our nation’s homeownership rate to record levels. And remember, increasing the number of U.S. homeowners has been a priority for the last several presidential administrations.

The local lawsuit against Countrywide just shows that many people are to blame for the housing slump. Some mortgage companies passed out bad loans. Some borrowers were greedy, trying to get into homes they couldn’t really afford by taking out questionable adjustable-rate mortgages. Some real estate agents encouraged this practice. And legislators and industry watchdogs reacted too late to stop the problems.

At the same time, I’d hate for the Illinois lawsuit – or any of the highly publicized cases against Countrywide – to give people here the wrong idea. I work in the Chicago real estate market every day. I interact with the men and women who originate mortgage loans, sell homes, complete home inspections and conduct real estate appraisals. I can say, with complete confidence, that the vast majority of Chicago-area real estate professionals are skilled, knowledgeable and hardworking. These agents work with the best interests of homebuyers and sellers in mind.

No industry is perfect, and the home-selling business is no exception. But don’t read the negative reports in the media and think that the local real estate industry is full of crooks and swindlers. A few bad apples certainly don’t taint the entire barrel.

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