More than 450,000 Countrywide borrowers will be getting checks in the mail from the Federal Trade Commission as payback for excessive fees collected from borrowers struggling to keep their homes[1]. This is one of the largest judgments ever in an FTC case and it is the largest settlement yet in a mortgage servicing case. Jon Leibowitz, FTC chairman, called the settlement “astonishing” and added that he is “proud to be getting every single dollar back to hundreds of struggling consumers.” Some refunds are thousands of dollars, while others are less than $500. Countrywide was accused of not only adding fees and escrow charges to borrowers’ mortgage accounts without notice, but also “made false or unsupported claims about how much borrowers owed [and] the status of the loans”[2]. Bank of America, which purchased Countrywide in 2008, opted to settle instead of taking on the “expense and distraction associated with litigating the case,” explained Rick Simon, a BofA spokesman. He emphasized that the claims began before BofA acquired Countrywide and the settlement covers transactions made only by Countrywide. “There was no admission of any wrongdoing as part of the settlement,” he said.
Do you think that as long as the money goes out, it matters if Countrywide – or Bank of America, for that matter – actually admits that they did anything wrong?
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[1] http://www.dsnews.com/articles/ftc-returns-108m-in-overcharges-to-countrywide-borrowers-2011-07-20
[2] http://www.latimes.com/business/la-fi-countrywide-refunds-20110721,0,3386190.story