The lax lending practices that led to record foreclosures are now coming back to haunt one company that actively lent money to underqualified buyers around the Chicago region.

The Illinois Attorney General is planning to sue Countrywide Financial Corp and Angelo Mozilo, the company’s CEO to recover damages. The state accuses Countrywide of using deception in granting loans to buyers the company knew wouldn’t be able to pay back the loans once interest rates rise after a couple of years.

The state’s attorney general office has been investigating the company since late last year, and now has found enough evidence to bring a civil suit against the company. Attorney General Lisa Madigan will demand that all loans that have been issued using deceptive techniques be modified to reflect fair market conditions.

A ruling in favor of the state could have an immediate effect on many homeowners around the state who are now facing difficulty paying high interest payments, and in many cases, risk foreclosure of their property.

The news would be welcomed around the North Shore Chicago Real Estate market, which has seen a rise in foreclosures in many areas. Homeowners will have to wait for the court’s ruling, which is not expected for months.

Technorati Tags: North Shore Chicago Real Estate, Chicago Homes For Sale, Chicago Foreclosures

This entry was posted on Wednesday, June 25th, 2008 at 6:16 pm and is filed under Evanston Real Estate(t) , Lake Forest Real Estate(t) , Lake Bluff Real Estate(t) . You can leave a response.