With the sub-prime mortgage crisis giving no hint of going away, the hunt for those supposedly responsible has already started. Attorneys general from two American states filed separate lawsuits against the country's largest mortgage lender Countrywide Financial Corp. and its CEO yesterday, the same day the company's shareholders approved the proposed takeover by Bank of America Corp. (See: Bank of America's $4-billion acquisition of mortgage lender Countrywide cleared)

"Countrywide's conduct has contributed to the high number of foreclosures in Illinois and caused significant harm to the public, the market, and scores of Illinois borrowers and homeowners," according to a draft of the lawsuit provided by Attorney General Lisa Madigan's office.

Madigan says Countrywide offered unfair loans with risky features, used misleading sales techniques and encouraged employees and brokers through incentives to sell more high-risk loans.

"Countrywide's unfair lending practices have harmed tens of thousands of borrowers who've been placed in unaffordable loans and, as a result, our communities are now being destabilized by a skyrocketing number of home foreclosures," Madigan said in a statement Wednesday. Her office said that the company played a "major role" in the foreclosure crisis, all in an attempt to dominate the US mortgage market.

The lawsuit, which also names Countrywide chairman and CEO Angelo Mozilo as a defendant, seeks restitution for all affected consumers who lost their homes or otherwise ran into trouble on their loans.

"This includes providing financial relief to borrowers who lost their homes to foreclosure, refinanced, sold or have loans currently being serviced by Countrywide, even if that requires Countrywide to repurchase loans from current investor owners," according to Madigan's office.

Separately, California Attorney General Jerry Brown has sued Countrywide, a spokeswoman at his office announced Wednesday. The company "engaged in false advertising and unfair competition in the origination of residential-mortgage loans and home-equity lines of credit," according to a copy of the complaint.

Some of the highlights of the California complaint are:

• ''Defendants viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard to borrowers' long-term ability to afford them and to sustain homeownership.''
  
• ''To further the deceptive scheme, defendants created a high-pressure sales environment that propelled its branch managers and loan officers to meet high production goals and close as many loans as they could without regard to borrower ability to repay.''
  
• ''Countrywide received numerous complaints from borrowers claiming that they did not understand their loan terms. Despite these complaints, defendants turned a blind eye to the ongoing deceptive practices engaged in by Countrywide's loan officers and loan broker 'business partners,' as well as to the hardships created for borrowers by its loose underwriting practices.''
  
• ''Underwriters were under intense pressure to process and fund as many loans as possible. They were expected to process 60 to 70 loans per day, making careful consideration of borrowers' financial circumstances and the suitability of the loan product for them nearly impossible.''
  
• ''Countrywide's high-pressure sales environment and compensation system encouraged serial refinancing of Countrywide loans.''
  
  As the largest mortgage lender and servicer in the US, Countrywide has been under scrutiny by federal and state authorities, and it faces numerous other lawsuits related to its lending practices.

Countrywide agreed in January to sell itself to Bank of America Corp. in return for shares valued at about $4 billion then but only $2.8 billion now, reflecting the decline in Bank of America's stock price over the past six months, largely because of worries about the acquisition of Countrywide. (See: Bank of America agrees to purchase Countrywide Financial Corp)