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LOS ANGELES – Attorney General Kamala D. Harris on Wednesday announced a $6.5 million settlement of a predatory lending case against Angelo Mozilo and David Sambol, former officers of Countrywide Financial Corp.
Harris said the settlement money will be used to establish an innovative statewide California Foreclosure Crisis Relief Fund to combat the effects of California's high rates of foreclosure and mortgage delinquency.
“Our prior settlement with Countrywide provided restitution for foreclosed homeowners and set in motion loan modification programs that have helped tens of thousands of consumers,” Harris said. “We will use the current settlement to help Californians affected by the mortgage crisis by providing grants to help homeowners facing foreclosure with relocation assistance and providing money to state and local agencies to prosecute mortgage fraud.”
During the 18 months ending last September, 282,000 California homes went into foreclosure, and in the last three months of 2010, notices of default were filed on another 70,000 homes in the state.
This settlement concludes litigation filed by Attorney General Edmund G. Brown Jr. in June 2008 against Countrywide Financial Corp., Countrywide Home Loans and Full Spectrum Lending, as well as Mozilo and Sambol.
The financial relief provided under the current settlement augments the Attorney General's October 2008 settlement with Countrywide to provide loan modifications and other foreclosure relief valued at $8.68 billion nationwide, with $3.5 billion provided to California borrowers.
According to the lawsuit, leading up to the mortgage crisis, Countrywide lured borrowers with low “teaser” rates often as low as 1 percent adjustable rate loans.
Its loan officers obscured the downsides of these loans, which included rapidly rising rates after teaser rates expired, big prepayment penalties, and negative amortization in which a borrower's total loan costs rose even as additional payments were made.
Countrywide also loosened its mortgage standards and verification procedures in order to write more loans.
As a result of these practices, tens of thousands of homeowners with Countrywide loans ended up in default and foreclosure.
The attorney general's lawsuit alleged that Mozilo and Sambol knew of these practices and allowed them to continue.
The complaint alleged that Countrywide sought to increase its share of the nationwide mortgage market to 30 percent through a deceptive scheme to mass produce loans – with little concern about borrowers' long-term ability to afford them. It then would sell the loans on the secondary market to earn the highest possible premiums.
The settlement with Mozilo, the CEO of Countrywide, and Sambol, its president, was filed Wednesday in Los Angeles Superior Court. Mozilo and Sambol left Countrywide when it was purchased by Bank of America in July 2008.
Bank of America acquired Countrywide's loan portfolio and assumed responsibility to make restitution to mortgage holders who qualify under the terms of the attorney general's 2008 settlement.
Since that settlement, Countrywide has made more than 32,000 modifications, worth more than $1.3 billion, on loans made to California borrowers and has paid $28 million in cash to Californians who lost their homes to foreclosure.
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SACRAMENTO – The Board of Equalization (BOE) has released California gasoline and diesel consumption figures for October 2010.
California gasoline consumption increased 0.9 percent in October 2010, while diesel fuel consumption declined 3.8 percent, compared with October 2009.
“Gas prices and consumption remained particularly stable throughout most of 2010, particularly in comparison to significant changes in 2008 and 2009,” said Board Member Betty T. Yee. “However, there has been more recent variation in diesel.”
In October 2010, gasoline demand rose 0.9 percent when Californians used 1.257 billion gallons of gasoline compared to 1.246 billion gallons in October 2009.
The average California gasoline price at the pump in October 2010 was $3.15 per gallon compared to $3.06 in October 2009, a 2.9 percent increase.
Diesel fuel sold in California during October 2010 totaled 216 million gallons compared to October 2009’s total of 224 million gallons, which is a decrease of 3.8 percent.
California diesel prices were $3.21 per gallon in October 2010 an increase of 12.2 percent compared to October 2009 when the average diesel price was $2.86 per gallon.
The BOE is able to monitor gallons through tax receipts paid by fuel distributors. The figures reported monthly are net consumption that includes BOE audit assessments, refunds, amended and late tax returns, and State Controller’s Office refunds.
Figures for November 2010 are scheduled to be available at the end of February 2011.
All monthly, quarterly, and annual figures can be viewed at www.boe.ca.gov/sptaxprog/spftrpts.htm.
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SACRAMENTO – The Board of Equalization has announced the creation of a new mobile Web app to enable taxpayers to conveniently get up-to-date information on BOE services.
The new mobile Web app is accessible from the BOE Web site at www.boe.ca.gov and will enable taxpayers to find their tax rate using their phone’s gps system or by searching for a city or county.
Additionally, the BOE has provided a link to www.geotax.com, which hosts an application that will enable taxpayers to find their sales tax rate based on an address.
This enables taxpayers and consumers to find the tax rate for any address in the state.
BOE previously released two apps tailored for mobile devices such as smart phones and an iPhone app.
By clicking on the cell phone icon, mobile users can also find a BOE district office or validate an account number.
To help taxpayers connect with individual board members, the BOE has enabled Californians to easily find their representative through the BOE Web site by simply typing in their address.
They will be able to find the closest constituent office, information on how to contact the board member, access the board member’s Web site for the latest information in the district, and find a BOE field office.
BOE hopes to continue to expand options for taxpayers to easily and conveniently obtain useful information from their mobile devices and from the convenience of the Web.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board.
The BOE collects more than $48 billion annually in taxes and fees supporting state and local government services.
It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes.
For more information on other taxes and fees in California, visit www.taxes.ca.gov.
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SACRAMENTO – The California State Board of Equalization (BOE) on Wednesday unanimously voted to name Jerome E. Horton as chairman of the publicly elected tax board.
The BOE also selected Michelle Steel as vice chair.
"I look forward to collaboratively leading the board during these economically challenging times," Horton said. "Given my 21 years as a veteran of the BOE, and my more than a decade of experience as an elected official, I have seen firsthand the issues that personally affect taxpayers. That is why it is so important for us to make it easier for California Taxpayers to comply with the law, to level the playing field and assure fair treatment of our constituents."
Chairman Horton represents the Fourth Equalization District and its 73 cities within Los Angeles County. Mr. Horton served as Vice Chairman of the Board from January 2010 to January 2011.
Vice Chair Steel represents the Third Equalization District with more than eight million people in the counties of Imperial, Orange, Riverside, San Diego, and portions of Los Angeles and San Bernardino.
Elected to the Board of Equalization in 2006, Michelle Steel serves as the country's highest ranking Korean-American officeholder and California's highest ranking Republican woman.
Horton is the only member of the board with more than 21 years of previous experience with the agency.
As a staff member of the board, Horton served as legislative deputy specializing in business tax law, supervisor, district reviewer and tax auditor from 1979 to 2000.
Horton also served on the California Medical Assistance Commission and in the State Assembly representing the 51st Assembly District from 2000 to 2006.
While in the Assembly, Horton chaired the Governmental Organization committee, Community College Board and served on the California State Workforce Investment Board and the Cultural Endowment Board.
Prior to joining the Assembly, Horton served on the Inglewood City Council from 1996 to 2000 and as a member of the Redevelopment Agency.
Horton is also the first African American to be elected to the Board of Equalization since it inception in 1879.
While in the Assembly, Horton authored the California Cigarette and Tobacco Products Licensing Act of 2003 (AB 71) and the state law requiring both the BOE and the Franchise Tax Board to post online a list of the largest 250 tax delinquencies of more than $100,000 in tax.
The chairman and vice chair positions were decided Wednesday at the first 2011 meeting of the California State Board of Equalization.
The five-member Board includes Chairman Jerome E. Horton (Fourth District), Vice Chair Michelle Steel (Third District), Board Member Betty T. Yee (First District), Board Member Senator George Runner (ret.) (Second District), and California State Controller John Chiang.
The California State Board of Equalization is a publicly elected tax board.
The BOE collects more than $48 billion annually in taxes and fees supporting state and local government services.
It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. It has offices in New York, Texas, Chicago, and is based in California with over 4,400 employees.
Horton encourages young people to consider careers with the Board of Equalization and other state agencies in the field of law, accounting, real estate and a variety of other fields of public service.