Refunds to go out in Countrywide settlement
Washington • More than 450,000 homeowners who took out mortgages with Countrywide Financial Corp. will soon receive their slice of a nearly $108 million settlement over claims that the lender overcharged borrowers facing foreclosure.
The Federal Trade Commission said Wednesday it will mail refund checks to 450,177 borrowers starting Thursday.
The action stems from a settlement reached last year between the FTC and Bank of America Corp., which acquired Countrywide in July 2008.
The deal resolved federal charges that Countrywide charged borrowers who were behind on their mortgages with fees that added up to hundreds or thousands of dollars. The fees were for services like property inspections and landscaping.
At the time of the settlement, the FTC estimated Countrywide had overcharged around 200,000 homeowners. That was later revised to more than 450,000.
In addition, the FTC accused Countrywide of making false claims to some borrowers about how much they owed on their mortgage or the status of their loan, and claimed the lender added fees and other charges to borrowers' mortgage accounts without notice.
The allegations that led to the settlement took place before Bank of America acquired Countrywide.
The refunds will be distributed to consumers whose loans were serviced by Countrywide between Jan. 1, 2005, and July 1, 2008.