Industry NewsMortgage

FTC settles Countrywide loan servicing case

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

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 o...