Countrywide Bucks Illinois Regulation, Continues Lending
Countrywide Home Loans Inc. said Thursday it planned to ignore an Illinois state regulation to cease new mortgage lending in the state. The Bank of America Corp. (BAC) -owned lender received a conditional license Thursday to cooperate in a national settlement regarding deceptive mortgage practices. Under the license, the Illinois Department of Financial and Professional Regulation will monitor Countrywide's activity each month to ensure it is complying with the regulation and only restructuring existing loans. Although Countrywide operates in Illinois under a state license, officials said the state's decision has no impact on Countrywide's ability to originate loans through the federally-chartered subsidy Countrywide Bank FSB. "We will fully cooperate with the [state] on this issue but we think it's very important that our customers, our existing customers or even those considering future home financing options understand that Countrywide is still open for business in Illinois," Bank of America spokesman Dan Frahm said Thursday night, according to the Chicago Tribune. The state said it recognizes Countrywide Bank's authority to lend through its federal charter. "We have no control over their federal charter," said department spokeswoman Susan Hofer, according to the Tribune. "We took this action because we don't believe that Countrywide Home Loans Inc. should be issuing new loans. We can't tell the federal government what they should do. All we can say is we don't think Countrywide should be making loans." Through the department's 18 months of investigation, Illinois fined Countrywide $185,000 in March for closing 21 branches without proper notice. The state granted Countrywide the provisional license Thursday to allow continued mortgage workouts with 11,000 existing Illinois customers. Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade. Editor’s Note: To contact the reporter on this story, email email@example.com.