Countrywide Agrees to $108M Class Action Settlement for Exploiting Struggling Homeowners

Countrywide Financial just can’t seem to stay out of trouble this year. In addition to the class action settlement we told you about last month, Countrywide has agreed to settle another class action lawsuit over allegations that it “abused” and overcharged 200,000 struggling homeowners who fell behind on mortgage payments.

According to the Federal Trade Commission, Countrywide used unfair and deceptive practices while servicing the mortgages of homeowners in default or Chapter 13 bankruptcy. “Countrywide profited from making risky loans during the boom years and they profited again when the loans failed,” said FTC Chairman Jon Leibowitz. The FTC alleges Countrywide:

* charged excessive fees for default-related services like property inspections,

* made claims about amounts owned by homeowners in bankruptcy that were false or couldn’t be backed up; and

* didn’t tell people going through bankruptcy when new fees or charged were being added to their loans.

Countrywide has agreed to pay $108 million in refunds to homeowners who were charged inappropriate fees or were victims of false statements made in bankruptcy court. If you’re eligible for the class action settlement, the FTC will notify you by mail. You don’t need to do anything now to make claim, but you can keep track on the progress of this class action settlement by visiting www.ftc.gov.