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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Showing posts with label Countrywide. Show all posts
Showing posts with label Countrywide. Show all posts
Friday, July 22, 2011
Wednesday, June 9, 2010
FTC Settles Countrywide Loan Servicing Case
Delinquent homeowners who allegedly paid inflated fees to two Countrywide mortgage servicing companies for services like property inspections and lawn mowing will receive $108 million in refunds under the terms of a settlement between Bank of America and the Federal Trade Commission.
The companies created subsidiaries to hire third-party vendors, charging markups of 100 percent or more, the FTC said. The companies also failed to tell borrowers in bankruptcy when new fees and escrow charges were added to their accounts.
Most mortgage contracts require that homeowners pay for necessary default-related services, but mortgage servicers may not mark up the cost to make a profit or charge homeowners for services that are not reasonable or appropriate to protect the mortgage holder's interest in the property, the FTC said.
Homeowners overcharged by Countrywide Home Loans Inc. and Countrywide Home Loans Servicing LP (now BAC Home Loans Servicing LP) before July 2008 will receive refunds. Borrowers who are eligible for refunds will receive a notice in the mail.
For more details, you can view the entire FTC release: http://www.ftc.gov/opa/2010/06/countrywide.shtm
The companies created subsidiaries to hire third-party vendors, charging markups of 100 percent or more, the FTC said. The companies also failed to tell borrowers in bankruptcy when new fees and escrow charges were added to their accounts.
Most mortgage contracts require that homeowners pay for necessary default-related services, but mortgage servicers may not mark up the cost to make a profit or charge homeowners for services that are not reasonable or appropriate to protect the mortgage holder's interest in the property, the FTC said.
Homeowners overcharged by Countrywide Home Loans Inc. and Countrywide Home Loans Servicing LP (now BAC Home Loans Servicing LP) before July 2008 will receive refunds. Borrowers who are eligible for refunds will receive a notice in the mail.
For more details, you can view the entire FTC release: http://www.ftc.gov/opa/2010/06/countrywide.shtm
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