Florida Eyes Subprime Settlement From BofA

Florida Eyes Subprime Settlement From BofA

Tuesday, July 1, 2008 11:11 AM

MIAMI -- Florida hopes to negotiate a settlement with the Bank of America for what the state called the deceptive lending practices of its newly acquired mortgage unit Countrywide Financial Corp., the state attorney general said Tuesday.

"There is technically a deep pocket. They've acquired them, they assume their liabilities," Florida Attorney General Bill McCollum told journalists on a conference call.

Bank of America Corp completed its purchase of Countrywide on Tuesday, a day after Florida filed a civil lawsuit accusing Countrywide of deceptive lending practices.

The state alleged that the mortgage lender gave subprime loans to borrowers who could not repay them, loaned money at higher subprime rates to people who qualified for prime rate loans and engaged in other unfair trade practices.

A Bank of America spokesman could not immediately be reached for comment.

McCollum said he could not estimate how many Floridians were affected. The lawsuit asks for actual damages to all consumers who were injured, plus a fine of up $10,000 for each act that violates the law.

The attorney general believes Countrywide still has a large portfolio of assets that could be tapped and that he would be in touch with Bank of America's attorneys to try to negotiate a settlement.

"We aren't ready yet to give you a dollar figure but it would have to be a dollar settlement of some sort," McCollum said.

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