This is a great article about the foreclosure-related mismanagement/abuse relfected in lawsuits being brought against lending giant Countrywide, one of several lenders recently embroiled in controversy. As the saying goes, “the bigger they are…”
NEW YORK (Reuters) – Countrywide Financial Corp, which was the largest U.S. mortgage lender before being acquired by Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), faces a Federal Trade Commission probe into whether its loan-servicing activities violated federal law.
Countrywide in its quarterly report filed on Monday with the U.S. Securities and Exchange Commission said the FTC has issued civil investigative demands requiring it to provide documents.
It said the agency is assessing whether activities related to Countrywide’s $1.49 trillion servicing portfolio, covering roughly 9 million borrowers, violated laws the agency administers.
FTC spokeswoman Claudia Bourne-Farrell confirmed that the agency had begun a probe but she did not elaborate. Servicers handle billing and payment collections.
The FTC probe adds to legal headaches for Bank of America, which last month paid about $2.5 billion to buy Countrywide.
California, Connecticut, Florida and Illinois have all sued Countrywide over its lending practices. Countrywide also faces U.S. Department of Justice lawsuits accusing it of abusing or mismanaging the bankruptcy and foreclosure processes.
Charlotte, North Carolina-based Bank of America last week said Countrywide also faces a formal SEC probe. This concerns whether former Countrywide Chief Executive Angelo Mozilo violated insider trading laws and whether Countrywide’s financial disclosures misled investors, the Los Angeles Times said.
Separately, Countrywide is under investigation by the FBI, authorities have said. That agency last month said it had 21 corporate targets in its probe of potential corporate fraud in the mortgage industry.
Calabasas, California-based Countrywide said the Justice Department cannot confirm or deny whether the FBI is investigating the company. The Justice Department could not immediately be reached for comment.
(Reporting by Jonathan Stempel; Additional reporting by Diane Bartz in Washington, D.C., editing by Mark Porter)