Countrywide, sued by California Attorney General Jerry Brown for "unfair business practices" and "false advertising" was making high cost mortgages "to homeowners with weak credit, adjustable rate mortgages (ARMs) that allowed homeowners to make interest-only payments". When housing prices decreased, homeowners in ARMs then had little incentive to pay their monthly payments, since their home equity had disappeared. This caused Countrywide's financial condition to deteriorate, ultimately resulting in a decision by the Office of Thrift Supervision to seize the lender.
Who sued Countrywide for unfair business practices and false advertising? What type mortgages allowed homeowners to make interest-only payments? What happened to home equity when housing prices decreased? Who made the decision to seize Countrywide after their financial condition deteriorated? What type credit did borrowers obtaining mortgages from Countrywide have?