The third act: Enter the lawyers

In America, boom-bust cycles have a standard third act: Prolonged litigation. And so we have the news over the last two days that the states of Illinois and California are suing the nation's largest mortgage lender, Countrywide Home Loans.

First the news from Ilinois:

"The nation's biggest mortgage lender engaged in "unfair and deceptive" practices to get homeowners to apply for risky mortgages far beyond their means."

Then the news from California:

"Countrywide and its top executives, beginning in 2004, plotted to loosen or ignore lending standards so they could make more sub-prime mortgages and other adjustable-rate loans that were promoted by emphasizing low initial rates."

Countrywide told the LA Times it had no immediate comment.

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