Illinois to sue Countrywide; tip of iceberg?

We've noted before that prosecution and regulatory action always follow scandals. So the news that the state of Illinois will sue Countrywide and its CEO, Angelo Mozilo, come as no surprise. You can bet that other states are mulling similar action. The charges will be familiar: misleading marketing, perverse incentives to sell inappropriate mortgages, lack of disclosure, inflated income...those sorts of things.

So what effect this will have on Bank of America, which has committed to a purchase of the troubled mortgage company? This may be the tip of a very large mountain of regulatory action from a host of players, including the SEC and FBI. Bank of America--CEO Ken Lewis in particular--has a lot riding on this. Countrywide needs to clean up fast.

For more:
- here's a New York Times article

Related Articles:
Should Bank of America walk away from Countrywide?
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Countrywide to be Ken Lewis's undoing?