What Good Are the Reports and Analyses?
It will be used to reimburse overcharged homeowners whose loans were serviced by Countrywide before it was acquired by Bank of America in July Homeowners cannot choose their mortgage servicer.
But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue.
Homeowners do not have any choice in who performs default-related services or the cost of those services, and they have no option to shop for those services. In addition, in servicing loans for borrowers trying to save their homes in Chapter 13 bankruptcy proceedings, the complaint charges that Countrywide made false or unsupported claims to borrowers about amounts owed or the status of their loans.
Countrywide also failed to tell borrowers in bankruptcy when new fees and escrow charges were being added to their loan accounts.
The FTC alleges that after the bankruptcy case closed and borrowers no longer had bankruptcy court protection, Countrywide unfairly tried to collect those amounts, including in some cases via foreclosure. Countrywide Home Loans, Inc.
In addition, the settlement order prohibits Countrywide from taking advantage of borrowers who have fallen behind on their payments. The defendants continue to service millions of mortgage loans, including tens of thousands of loans involving borrowers in bankruptcy and foreclosure. In the servicing of loans, the defendants are permanently barred from: Making false or unsubstantiated representations about loan accounts, such as amounts owed.
Charging any fee for a service unless it is authorized by the loan instruments, by law, or by the consumer for a specific service requested by the consumer. Charging any fee for a default-related service unless it is a reasonable fee charged by a third party for work actually performed.
If the service is provided by an affiliate of a defendant, the fee must be within limits set by state law, investor guidelines, and market rates. In addition, Countrywide must advise consumers if it intends to use affiliates for default-related services and, if so, provide a fee schedule of the amounts charged by the affiliates.
The settlement also requires Countrywide to make significant changes to its bankruptcy servicing practices. For example, Countrywide must send borrowers in Chapter 13 bankruptcy a monthly notice with information about what amounts the borrower owes — including any fees assessed during the prior month.
The defendants also must implement a data integrity program to ensure the accuracy and completeness of the data they use to service loans in Chapter 13 bankruptcy.
This case was brought with the invaluable assistance of the United States Trustee Program, the component of the Department of Justice that oversees the administration of bankruptcy cases and private trustees. The Commission vote to authorize staff to file the complaint and settlement was The complaint and settlement were filed in the U.Countrywide offered fixed, adjustable mortgages as well as home equity loans and lines of credit and was well known as one of the leading subprime lenders in America.
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About Plaza Home Mortgage, Inc.
Plaza Home Mortgage, Inc. has earned a well-deserved reputation as an esteemed industry leader by serving our communities through both wholesale and correspondent lending production channels. Bank of America Home Loans is the mortgage unit of Bank of America. In , Bank of America purchased the failing Countrywide Financial for $ billion.
In , Countrywide financed 20% of all mortgages in the United States, at a value of about % of United States GDP, a proportion greater than any other single mortgage lender. Strawbridge v. Bank of NY Mellon: Appeals Court Justice Peter Agnes Gives Judicial Blessing to MERS Assignment System, Rejects Other Foreclosure Challenges The.
Investing in our employees at home and in the workplace so they can better serve our clients America Reaches Comprehensive Settlement With U.S. Department of Justice and State Attorneys General to Resolve Mortgage-related Litigations and Investigations The claims relate primarily to conduct that occurred at Countrywide and Merrill Lynch.