June 7, 2010
Countrywide mortgage service companies will pay $108 Million to settle a Federal Trade Commission lawsuit alleging that Countrywide subsidiaries collected excessive and illegal fees from troubled borrowers struggling to pay their mortgage loans. According to the lawsuit, Countrywide’s loan-servicing operation deceived homeowners who were behind on their mortgage payments into paying inflated fees adding up to hundreds and in certain cases thousands of dollars for property inspections, lawn mowing, and other “services” which were the creation of Countrywide subsidiaries which hired the vendors and marked up the prices of such “services” often by 100% or more for the sole purpose of generating revenue. The lawsuit alleges that this company strategy on the part of Countrywide was to increase profits from default-related service fees in bad economic times. The overcharges occurred on loans “serviced” by Countrywide before the July, 2008 Bank of America acquisition.
The lawsuit named Countrywide Home Loans, Inc. and BAC Home Loans Servicing LP formerly doing business as Countrywide Home Loans Servicing LP. The monies will be refunded to homeowners who were overcharged before July, 2008. There are also terms permanently barring the defendants from engaging in certain illegal practices, and requiring Countrywide to advise consumers if it intends to use affiliates for default-related services and, if so, to provide a fee schedule for amounts charged by affiliates.
We wish to thank one of our devoted readers for e-mailing this important announcement to us today.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com