The FTC is mailing out 450,177 checks worth nearly $108 million to homeowners who were allegedly overcharged by former mortgage giant Countrywide.
Unfortunately, that means the average check an overcharged homeowner will receive is a paltry $240, though some will get checks worth as much as several thousand dollars.
Apparently homeowners behind on mortgage payments were charged excessive fees for services such as property inspections and lawn mowing, meant to protect the mortgage lender’s interest in the property.
But instead of hiring third-party vendors, Countrywide used subsidiaries to hire the vendors who often marked up the price of the services by 100 percent or more.
Additionally, Countrywide hit borrowers with fees and escrow charges without notice while they were trying to save their homes in Chapter 13 bankruptcy proceedings.
“It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners,” FTC Chairman Jon Leibowitz said in a release.
“Countrywide’s unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money.”
The FTC complaint alleges that Countrywide’s strategy was to increase profits from default-related services during rough economic times.
Checks are being distributed to consumers whose loans were serviced by Countrywide between January 1, 2005 and and July 1, 2008.
Bank of America purchased Countrywide back in 2008, but the company continues to make negative headlines.