Countrywide Financial

Countrywide Financial (CFC) is widely blamed by some for helping foment the U.S. housing crisis. They are accused by doing it through free-wheeling lending. Now the lender is being sued for alleged deceptive mortgage practices by officials in its home states of California and in Illinois.

Ironically, the civil lawsuits, were brought the same day shareholders approved the company's takeover by Bank of America (BAC). The merger is set to close by July 1.

Bank of America said Thursday it will cut about 7,500 jobs after it closes its acquisition of mortgage lender Countrywide Financial Corp.

Countrywide Financial is the largest U.S. mortgage lender and is accused in the lawsuits of unfair trade practices that encouraged homeowners to take out risky loans, regardless of whether they could repay them.

California and Illinois officials allege that the company relaxed mortgage standards in an effort to rope in as many customers as possible.

Countrywide "exploited the American dream of homeownership," then sold its mortgages for huge profits to third-party investors, California Attorney General Jerry Brown said.

Illinois Attorney General Lisa Madigan also asked the court to put a 90-day stay on Countrywide loans in foreclosure in her state to allow her office time to review them. Madigan said the foreclosure rate on Countrywide loans was more than double that of other lenders in 2006 and 2007 in Cook County, which includes Chicago.