Tag Archives: Bank of America/Countrywide

The Federal Trade Commission is mailing 450,177 refund checks worth almost $108 million to homeowners who were allegedly overcharged by subprime lender Countrywide. According to the FTC, homeowners who were in default were charged excessive and unlawful fees for services such as property inspections, lawn mowing, and other services meant to protect the lender's interest in the property. The agency alleges that Countrywide also added fees and escrow charges to the accounts of borrowers in bankruptcy without notice.

Bank of America says it is looking to downsize its mortgage servicing portfolio. Company executives told investors Tuesday that they will become more discriminating when adding mortgage servicing rights (MSRs) to their books and will be focused on selling off MSRs more aggressively. The company made roughly $70 million from MSR sales during the second quarter of this year, but on the whole posted its largest-ever three month loss - $8.8 billion - as a result of heavy losses within the consumer real estate services division.

A group of mortgage-bond investors has filed a petition with the New York Supreme Court requesting to be cut loose from the $8.5 billion settlement proposed last week by Bank of America. The settlement would resolve nearly all of the lender's repurchase exposure stemming from legacy first-lien residential mortgage bonds issued by Countrywide. Eleven of the companies to be compensated by the arrangement, though, say BofA's proposal is ""inadequate.""

Fitch Ratings expects that Bank of America's recently proposed settlement for mortgage repurchase and servicing claims will positively affect the ratings of approximately 10 percent of Fitch-rated U.S. residential mortgage-backed securities (RMBS) in the affected Countrywide trusts. In addition, the ratings agency says payouts from the settlement in the short term and improved servicing practices over the longer term are likely to further improve recovery prospects for a larger portion of bonds.

The Justice Department announced a settlement with Bank of America and Saxon Mortgage to resolve allegations that the companies wrongfully foreclosed on active duty service members without obtaining court orders, a violation of the Servicemembers Civil Relief Act (SCRA). The combined settlements represent more than $22 million in monetary victim relief. Both companies have also agreed to repair negative credit reporting related to the foreclosures and will not pursue remaining amounts owed under the mortgages.

A federal judge in California has dismissed all claims brought against Bank of America by investors who bought mortgage-backed securities (MBS) from Countrywide before BofA purchased the subprime lender in 2008. Even after the investors narrowed the scope of their case, the judge granted Bank of America's motion to dismiss on the grounds that the plaintiffs failed to show that two separate transactions between the bank and Countrywide involving the transfer of assets constituted a de facto merger.

An Internet hacker group, going by the name Anonymous, claims to have proof that Bank of America committed mortgage fraud by ""knowingly hiding foreclosure info from federal auditors."" The group has obtained a slew of inter-departmental emails from a former employee of Balboa Insurance, a BofA subsidiary that the company sold last month. The whistleblower says he was instructed to remove document tracking numbers so supporting paperwork could not be matched to the corresponding loans. The bank called the ""extravagant assertions"" untrue.

Bank of America said Tuesday that it is stepping up efforts to help distressed homeowners before they fall into foreclosure, with plans to double its borrower outreach staff in 2011, open new regional homeowner assistance centers, and increase collaboration with nonprofit housing counselors. But company officials warned shareholders that same morning that BofA's $1 trillion portfolio of problem assets -- loans that are already delinquent and those risky home lending products that the company has taken off the shelf -- will take three years to work through.

After paying a $22.5 million fine, and after Bank of America footed the bill for a $45 million settlement on his behalf, former Countrywide CEO Angelo Mozilo has had his name cleared. Criminally, at least. In October Mozilo settled a civil lawsuit with the Securities and Exchange Commission for $67.5 million, while not admitting or denying fault for his actions, which the SEC says helped bring about the financial meltdown. The Justice Department has reportedly closed its investigation of Mozilo that began in 2008, determining that those same actions were not criminal.

Rep. Darrell Issa, on Wednesday asked that a subpoena be issued to Bank of America, requesting the company hand over any documents related to the ""Friends of Angelo"" program formerly offered by Countrywide Financial. The VIP program was dubbed Friends of Angelo because it was headed by former Countrywide CEO Angelo Mozilo. The program is said to have offered preferential loan terms and conditions to its participants but did not offer them to the public.