Countrywide pulls out of Georgia
February 13, 2003
Will no longer offer subprime mortgages because of new restrictions
Inman News Features
Countrywide Financial Corp. said today it will no longer offer subprime mortgage loans in Georgia as a result of the state's restrictive lending law.
The company said its Countrywide Home Loans and Full Spectrum Lending branches won't accept applications for subprime mortgages less than $322,700 in the state.
Georgia's Fair Lending Act is designed to protect borrowers from predatory lending by imposing new restrictions on the so-called "predatory loans" based on the annual percentage interest rate and the amount of points and fees charged by the lender.
Predatory lending laws aren't new. Several states have passed laws in recent years, but Georgia's law is different because of its "assignee liability" clause, which allows borrowers to seek punitive damages against the lender and any company that bought the loan after it was made.
Countrywide said that rating agency and investor reaction to Georgia's "unduly restrictive" law have made it infeasible to continue subprime lending in the state, but that it continues to support federal legislation that aims to protect borrowers from unscrupulous lending practices.
Countrywide Financial Corp., through its subsidiaries, provides mortgage banking and diversified financial services in domestic and international markets.
Copyright: Inman News Service