Countrywide_Lawsuite

In regards to the Countrywide lawsuit the basis appears to be linked to the fact that the company felt like there was no wrong doing when in fact there was some wrong doing on Countrywide’s side. Countrywide was an enterprise driven by only one purpose and that was to originate and securitize as many mortgage loans as possible. Investors relied on information Countrywide supplied to them. Countrywide knowingly gave false information to generate profits for the company. The misstatements that Countrywide provided to investors was an indication of fraud. “The lawsuit against Mr. Mozilo has no basis in law or fact,” said David Siegel, an attorney for Mozilo, in an e- mailed statement. “We expect to prevail against these plaintiffs as we have against other disgruntled, sophisticated MBS investors (Freifeld, 2011, p. 1).” One ground rule that manifested the situation could be the fact that several individuals were placed into homes that he or she could not afford. Loan officers were not telling individuals that his or her interest rate was going to jump, prepayments were going to be penalized, and the overall amount of the loan would skyrocket (Press, 2011, p. 1). This misleading information helped to manifest the situation which caused the lawsuit. Another ground rule was the false advertisement Countrywide used to get the customers. Some customers make decisions based on advertisement. If a company is displaying false advertisement then that company is not being truthful to the customers. References Freifeld, K. (2011, January 25,). Countrywide Accused in Lawsuit of 'Massive Fraud'. Retrieved April 6, 2011, from http://www.businessweek.com/news/2011-01-25/countrywide-accused-in-lawsuit-of-massive-fraud-.html Press, T. A. (2011, Feburary 2). Calif. settles lawsuit against Countrywide execs. Retrieved April 6, 2011, from http://www.denverpost.com/rawnews/ci_17274040