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The ""Federal Trade Commission"":http://www.ftc.gov (FTC) is mailing 450,177 refund checks worth almost $108 million to homeowners who were allegedly overcharged by subprime lender Countrywide Home Loans.
[IMAGE]The federal agency ""reached a settlement"":http://www.ftc.gov/opa/2010/06/countrywide.shtm with Countrywide last year over allegations that the company collected excessive fees from borrowers who were struggling to keep their homes.
The FTC says the $108 million resolution represents one of the largest judgments imposed in an FTC case, and the largest mortgage servicing case.
""It's astonishing that a single company could be responsible for overcharging more than 450,000 homeowners,"" said Jon Leibowitz, FTC chairman.
""Countrywide's unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of
[COLUMN_BREAK]thousands of struggling consumers who can least afford to lose the money,"" Leibowitz added.
The FTC's June 2010 settlement order required Countrywide to pay $108 million to refund borrowers who were charged excessive and according to the federal agency ""unlawful"" servicing fees.
The refunds are being distributed to consumers whose loans were serviced by Countrywide between January 1, 2005, and July 1, 2008, before the subprime lender was acquired by ""Bank of America"":http://www.bankofamerica.com. The amount of each check will vary from less than $500 to as much as several thousand dollars.
According to the FTC, homeowners who were in default on their loans were charged excessive fees for services such as property inspections, lawn mowing, and other services meant to protect the lender's interest in the property.
Officials say Countrywide used subsidiaries to hire third-party vendors to perform these services. The subsidiaries allegedly marked up the price of the services charged by the vendors -- often by 100 percent or more -- and Countrywide then charged the homeowners the marked-up fees.
The FTC complaint alleges that the company's strategy was to increase profits from default-related service fees in bad economic times.
The agency alleges that Countrywide also made false or unsupported claims to borrowers in bankruptcy about amounts owed or the status of their loans, and added fees and escrow charges to their mortgage accounts without notice.
