Housing Information :: Countrywide customers to be repaid $108 million for overcharges

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Released: June 08, 2010

Countrywide customers to be repaid $108 million for overcharges

Source: Dina ElBoghdady, Washington Post (Free Registration)

Bank of America, owner of former mortgage giant Countrywide Financial, will pay $108 million in refunds to hundreds of thousands of homeowners under one of the largest judgments imposed by the Federal Trade Commission.

The FTC alleges that Countrywide’s servicing arm, which was once responsible for collecting money on $1.4 trillion worth of loans, deceived borrowers into paying marked-up fees for property inspections, lawn mowing and other services after they defaulted on their loans in order to boost Countrywide’s profits when the housing market tanked.

The settlement, announced by the FTC on Monday, affects homeowners who were charged excessive fees by Countrywide before it was purchased by Bank of America in July 2008. Bank of America did not admit any wrongdoing on behalf of Countrywide and said the probe began before it acquired the California-based lender. In a statement, the company said it agreed to the settlement to “avoid the expense and distraction” of litigation.

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