Countrywide Sued By States Over Lending Practices

Countrywide Financial, the mortgage lender that lost $2.5 billion amid rising defaults and foreclosures as well as being widely blamed for worsening the U.S housing crisis through discriminatory lending has been sued by California and Illinois.

In a statement, California Attorney General Jerry Brown said, "Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market."

He called Countrywide, "in essence, a mass-production loan factory, producing ever increasing streams of debt without regard for borrowers."

California's lawsuit which was filed in Los Angeles Superior Court names the company president, David Sambol and the company's founder, chairman and CEO, Angelo Mozilo as defendants.

As Countrywide's shareholders approved the sale of the embattled lender to the Bank of America, reports were circulating of another lawsuit due to be directed from the state of Washington.