Countrywide Settles Claims of Improper Collections from Bankruptcy Filers
Countrywide Home Loans, one of the nation's largest subprime lenders over the past several years, has agreed to a settlement to resolve allegations that the company collected a host of improper fees and payments from debtors filing Chapter 13 bankruptcy.
The settlement recipient was a Chapter 13 bankruptcy trustee named Ronda J. Winnecour, who sought the loan histories for 293 bankruptcy cases in which she suspected violations of the U.S. bankruptcy code by Countrywide. Specifically, she alleged that Countrywide "lost" or "misplaced" payment checks made by debtors in foreclosure purposefully, in an attempt to skirt protections offered by the U.S. bankruptcy code.
Despite denials by the company that the errors made were "systematic," Countrywide will pay Winnecour $325,000 in the settlement.
Countrywide has a history of fabricating documents in foreclosures, as well as apparently "losing" them. They're paying for their deceptive practices, though, with layoffs of 12,000 employees as the company starts to tank.