Countrywide Involved in Foreclosure Probe

November 28, 2007 No Comments »

Another day, another bit of bad news for the nation’s number one mortgage lender, Countrywide Financial.

According to a New York Times report, Countrywide has been subpoenaed by the United States Trustee to determine if the lender abused the bankruptcy system when two borrowers foreclosed in southern Florida.

Specifically, Countrywide is being accused of tacking on improper charges to loans made to the homeowners who filed for bankruptcy protection.

In both cases, the borrowers disagreed with the fees Countrywide had charged, and in one case the homeowners claimed they were current on their mortgage after the lender said they owed $2,400 in overdue mortgage payments.

Countrywide failed to appear at both hearings, prompting the U.S. Trustee to get involved, while the judges ordered the fees stricken from the claims.

Now Countrywide must produce loan documentation for both loans, including copies of the notes, payment history, and the correspondence it had with the borrowers.

Though Countrywide objected to the trustee’s examination, the first hearing is scheduled for December 3rd and will go forward as planned.

A Countrywide spokesman would not comment on the pending litigation, but said it intended to appear at the hearings, and was also looking into the previous no-show.

The report also cited a recent study of 1,700 foreclosures, which found that dubious fees had been added to almost half of the loans examined.

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