Countrywide = Risky Lending

Faced with a stack of lawsuits, allegations and regulatory investigations into its new acquisition, Bank of America swiftly dropped the name “Countrywide,” now referring to its mortgage programs as simply “Bank of America Home Loans.”

Though they’ve cast off the newly unpopular name, Bank of America still defends the former Countrywide, stating that one of the most recent lawsuits filed against the company is without merit and that the corporation “intends to vigorously defend the case.”

This case, a class action lawsuit, is in regards to Countrywide allegedly goading buyers into risky, unaffordable subprime mortgage. The company has also been charged with violating federal conspiracy and racketeering laws, in addition to state laws that prohibit these actions explicitly.

Though Bank of America may be defending what’s left of Countrywide’s honor until it’s hoarse, federal judge Dana Sabraw of San Diego said today that borrowers have a case–and may proceed to sue Countrywide.

Former CEO of Countryside Angelo Mozilo is also facing several lawsuits–including those filed by stockholders and multiple states. Many of Countrywide’s employees have gone on to create a new real estate investment company, PennyMac Mortgage Investment Trust, a company that plans to capitalize on home loans that are currently suffering.

The largest lender in the nation prior to being whisked away by Bank of America for $2.5 billion in stock nearly a year ago, it seems that Countrywide has lost its esteem in the eye of the American people, and is nothing more than a passing name–except, of course, on the court docket.