Florida wants settlement from Bank of America

By Jane Sutton

MIAMI (Reuters) - The U.S. state of Florida hopes to negotiate a monetary settlement with Bank of America Corp for what the state calls deceptive lending practices by the bank's newly acquired mortgage unit, Countrywide Financial Corp, the state attorney general said on 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 completed its purchase of Countrywide on Tuesday, a day after Florida filed a civil lawsuit accusing Countrywide of deceptive and predatory lending. A Bank of America spokesman could not immediately be reached for comment.

The state alleges that the mortgage lender "carelessly or intentionally" 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.

The lawsuit says Countrywide threatened to fire its own underwriters if they tried to verify borrowers' ability to pay.

"They knew very well that these people couldn't qualify," McCollum said.

The attorney general said he could not estimate how many Floridians were affected but that his office had received complaints from more than 100 people, some of whom faced losing their homes to foreclosure.

The lawsuit seeks actual damages to all consumers who were harmed, a fine of up $10,000 for each violation of the law, plus attorney fees.