The Federal Trade Commission (FTC), the nation's consumer protection agency, sued Countrywide for unfair and deceptive practices in servicing the mortgages of homeowners in default or Chapter 13 bankruptcy. The settlement requires Countrywide to pay $108 million in refunds. The FTC will begin sending refunds to eligible homeowners in late July 2011. If you're eligible, you'll get a check in the mail.
What's this case about? According to the FTC, Countrywide used unlawful practices in servicing homeowners' mortgages. The company allegedly (1) charged excessive fees for default-related services like property inspections. (2) Made claims about amounts owed by homeowners in bankruptcy that were false or couldn't be backed up. (3)Didn't tell people going through bankruptcy when new fees or charges were being added to their loans.
The FTC settlement includes a $108 million consumer redress fund. Countrywide also agreed to stop the illegal servicing practices and make major changes to its business practices.
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