Countrywide heartburn

It's been a while since the Calabasas-based lender has disappeared under the wing of Bank of America, and at times the operation just seems like a bad dream. Then along comes a dispute that brings it up again. Like heartburn. This one, as noted by Barron's columnist Alan Abelson, involves Mortgage Guaranty Insurance Corp., which insured a bunch of bunch of Countrywide mortgages and now says some of them never should have been made. In its complaint to the American Arbitration Association, MGIC alleges that Countrywide embarked on "a reckless strategy to attract new subprime and other high-risk business."

There is, for example, the woman who bought a $600,000 house, claiming she worked as an account exec at a California investment firm, earned $13,494.03 (nice touch that three cents) a month, had a $45,000 bank account at Wells Fargo and, according to the insurance application, made a $30,000 down payment. When MGIC nosed around, it discovered the investment firm she supposedly worked for didn't exist, neither did the bank account, she hadn't made a down payment and she actually earned $3,901.58 a month as a janitor at a medical facility.

Apparently, there are a number of similar examples. Here's the complaint, courtesy of DealBreaker.