Delinquent homeowners who allegedly paid inflated fees to two Countrywide mortgage servicing companies for services like property inspections and lawn mowing will receive $108 million in refunds under the terms of a settlement between Bank of America and the Federal Trade Commission.

The companies created subsidiaries to hire third-party vendors, charging markups of 100 percent or more, the FTC said. The companies also failed to tell borrowers in bankruptcy when new fees and escrow charges were added to their accounts.

Most mortgage contracts require that homeowners pay for necessary default-related services, but mortgage servicers may not mark up the cost to make a profit or charge homeowners for services that are not reasonable or appropriate to protect the mortgage holder’s interest in the property, the FTC said.

Before Countrywide was acquired by Bank of America in March 2008, it was the top mortgage servicer in the country, handling payments on $1.4 trillion in mortgages.

Homeowners overcharged by Countrywide Home Loans Inc. and Countrywide Home Loans Servicing LP (now BAC Home Loans Servicing LP) before July 2008 will receive refunds. Borrowers who are eligible for refunds will receive a notice in the mail.

The defendants continue to service millions of mortgage loans, including tens of thousands of loans involving borrowers in bankruptcy and foreclosure, the FTC said. The settlement bars them from charging any fee for a default-related service unless it is a reasonable fee charged by a third party for work actually performed.

The companies must also advise consumers if they intend to use affiliates for default-related services and provide a fee schedule of the amounts charged.

The settlement also requires the companies send borrowers in Chapter 13 bankruptcy a monthly notice with information about what amounts the borrower owes, including any fees assessed during the prior month.


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