The New York Times reported today that Countrywide fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, raising questions about the business practices of the top U.S. mortgage lender.
The case involves Sharon Diane Hill, who filed for Chapter 13 bankruptcy protection in March 2001 in an attempt to save her home from foreclosure.
After a 60-month bankruptcy plan, Hill’s case was discharged and officially closed on March 9, 2007, with court records showing she was current on her mortgage.
But a month later, Hill received a notice of intention to foreclose from Countrywide, stating that she was in default and owed the company $4,166.
Kenneth Steidl, a lawyer representing Ms. Hill in her bankruptcy case, wrote to the lender a few weeks later stating that Hill had been deemed current on her mortgage during the period in question, but in May Countrywide sent Hill another notice stating that her loan was delinquent, demanding that she pay $4,715.58.
To justify the correspondence, Countrywide produced copies of three letters on company letterhead addressed to the homeowner, Mr. Steidl, and Ronda J. Winnecour, the Chapter 13 trustee for the western district of Pennsylvania.
Steidl said he had never received the letters in question, which were dated September 2003, October 2004 and March 2007, and noticed that his address on the first letter was not the location of his office at the time, but an address he later moved to.
In a later discussion, defense lawyer Ms. Puida said the letters had been “recreated” by Countrywide to reflect the escrow discrepancies.
The lawsuit in Pittsburgh is just one of 300 bankruptcy cases in which Countrywide’s practices have been scrutinized in western Pennsylvania.