July 1 (Bloomberg) -- Florida Attorney General Bill McCollum sued Countrywide Financial Corp., the biggest U.S. mortgage lender, for fraudulently making loans to homeowners who couldn't afford to repay them.

McCollum said in a complaint filed yesterday in a state court in Fort Lauderdale that the company and its founder, Angelo Mozilo, violated Florida's deceptive trade-practices law.

``The people most affected are people at the lower end of the spectrum, who could least afford to have a home,'' McCollum said today at a press conference in the state capital, Tallahassee.

McCollum joins California Attorney General Jerry Brown and their Illinois counterpart, Lisa Madigan, in pursuing lawsuits that accuse Calabasas, California-based Countrywide of deceiving consumers.

``We are not going to comment on the specifics of the lawsuit, except to say that we are fully cooperating with the office of the Florida attorney general,'' Countrywide said in an e-mailed statement. ``Our mission remains to assist our customers. We are particularly focused on working with our customers who are having difficulty making their mortgage payments, or who foresee difficulty with future rate resets.''

Brown and Madigan sued Countrywide on June 25, the same day its shareholders approved the company's sale to Charlotte, North Carolina-based Bank of America Corp. That purchase is scheduled to be completed today.

Acquisition Price

While the bank's acquisition of the lender was priced in January at about $4 billion, the value of the all-stock bid slid to $2.67 billion as the U.S. economy weakened and state and federal investigators examined the company's lending practices.

``The suit does not impact our commitment to completing the purchase as planned,'' Bank of America spokesman Scott Silvestri said yesterday in a phone interview.

The Florida lawsuit seeks unspecified damages for consumers hurt by the company, plus $10,000 fines for each violation of the state's laws. McCollum said his office received more than 100 consumer complaints about Countrywide by phone and mail.

``Subprime loans were approved for borrowers who were not qualified and could not afford such loans,'' McCollum said in the complaint. He also accused Countrywide of deceiving borrowers about the terms of their mortgages and of offering bonuses to underwriters based on the number of home loans they originated.

McCollum said he would be open to settlement talks with Bank of America, the second-largest U.S. bank by market value. At the same time, he sought to distance the bank from the mortgage lender's actions.

``This is not a suit that the public should be perceiving as against Bank of America,'' McCollum said. That was the reason he sued Countrywide before the sale closed, he said. McCollum declined to give a possible dollar value for a settlement.

Silvestri today declined to comment on the attorney general's remarks.

Bank of America stopped making subprime loans in 2001, Silvestri said. ``The combined company will not re-enter this business,'' he said yesterday.

The case is Office of the Attorney General v. Countrywide Financial Corp., 08-30105-03, Circuit Court for the State of Florida, 17th Judicial Circuit, Broward County.

To contact the reporter on this story: Andrew M. Harris in Chicago at aharris16@bloomberg.net.

Last Updated: July 1, 2008 10:55 EDT