Bank of America’s Countrywide to Pay $108M Settlement

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Countrywide Financial Corp., the mortgage company bought by Bank of America Corp., will pay $108 million to settle U.S. claims it charged excessive fees to struggling home buyers.

The Federal Trade Commission announced the settlement today at a news conference, describing the penalty as one of the largest in the agency’s history.

“Life is hard enough for homeowners who are having trouble paying their mortgage,” FTC Chairman Jon Leibowitz said. “To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible.”

Homeowners who were behind on mortgage payments were duped into paying inflated fees that could add thousands of dollars to their costs, the FTC said in a complaint. Countrywide, before it was acquired by Bank of America in 2008, was the top mortgage servicer in the U.S. with more than $1.4 trillion in its portfolio, the FTC said.

BusinessWeek

Comments

  1. AnonymousJune 8, 2010 at 10:14 AM

    Re: Predatory Lending / Excessive Fees

    Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.

    Here is an example of what I am talking about:
    Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)

    Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
    "Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM."

    The Center for Responsible Lending says YSP "steals equity from struggling families."
    1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000. 4. Clearly, this type of lending represents a major ripoff for consumers.

    http://merkley.senate.gov/newsroom/press/release/?id=A09C6A80-537A-4EB1-83C5-31925F046B6F

    ReplyDelete

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