Countrywide Financial Corp.'s shareholders approved its deal to sell itself to Bank of America Corp. as the attorneys general of California and Illinois filed civil lawsuits claiming the Calabasas, Calif., lender engaged in unfair and deceptive sales practices.
A 46-page complaint filed Wednesday in the California Superior Court for Los Angeles County named Angelo Mozilo, Countrywide's co-founder, chairman, and chief executive officer, and David Sambol, its president and chief operating officer, as defendants, along with the company.
The suit alleges that Countrywide targeted customers "with little or no regard" to their ability to repay loans.
B of A had said in February that Mr. Sambol would run its mortgage business after the deal closes. Last month the Charlotte company said Mr. Sambol would retire instead.
When the deal was announced in January, Kenneth D. Lewis, B of A's chairman, president, and CEO, said that he wanted Mr. Mozilo to stay at Countrywide "until the deal gets done, and then probably I would guess that he would then want to go have some fun."
The 78-page Illinois complaint, filed in the Circuit Court for Cook County, named Countrywide and Mr. Mozilo as defendants. It claims Countrywide gave employees and mortgage brokers incentives to push "unfair loan products with risky features" that led to increased delinquencies and foreclosures in that state.
Countrywide did not respond to requests for comment by press time.
Scott Silvestri, a spokesman for B of A, would not discuss the suits.
The deal is expected to close Tuesday.