Bank of America to Pay $108 Million in Countrywide Case


FTC v Countrywide Home Loans Incand BAC Home Loans ServicingConsent Judgment Order 20100607

Editor’s Comment: This “tip of the iceberg”  is important for a number of reasons. You should be alerted to the fact that this was an industry-wide practice. The fees tacked on illegally during delinquency or foreclosure make the notice of default, notice of sale, foreclosure all predicated upon fatally defective information. It also shows one of the many ways the investors in MBS are being routinely ripped off, penny by penny, so that there “investment” is reduced to zero.
There also were many “feeder” loan originators that were really fronts for Countrywide. I think Quicken Loans for example was one of them. Quicken is very difficult to trace down on securitization information although we have some info on it. In this context, what is important, is that Quicken, like other feeder originators was following the template and methods of procedure given to them by CW.Of course Countrywide was a feeder to many securities underwriters including Merrill Lynch which is also now Bank of America.

Sometimes they got a little creative on their own. Quicken for example adds an appraisal fee to a SECOND APPRAISAL COMPANY which just happens to be owned by them. Besides the probability of a TILA violation, this specifically makes the named lender at closing responsible for the bad appraisal. It’s not a matter for legal argument. It is factual. So if you bought a house for $650,000, the appraisal which you relied upon was $670,000 and the house was really worth under $500,000 they could be liable for not only fraudulent appraisal but also for the “benefit of the bargain” in contract.

Among the excessive fees that were charged were the points and interest rates charged for “no-doc” loans. The premise is that they had a greater risk for a no-doc loan but that they were still using underwriting procedures that conformed to industry standards. In fact, the loans were being automatically set up for approval in accordance with the requirements of the underwriter of Mortgage Backed Securities which had already been sold to investors. So there was no underwriting process and they would have approved the same loan with a full doc loan (the contents of which would have been ignored). Thus thee extra points and higher interest rate paid were exorbitant because you were being charged for something that didn’t exist, to wit: underwriting.
June 7, 2010

Bank of America to Pay $108 Million in Countrywide Case


WASHINGTON (AP) — Bank of America will pay $108 million to settle federal charges that Countrywide Financial Corporation, which it acquired nearly two years ago, collected outsized fees from about 200,000 borrowers facing foreclosure.

The Federal Trade Commission announced the settlement Monday and said the money would be used to reimburse borrowers.

Bank of America purchased Countrywide in July 2008. FTC officials emphasized the actions in the case took place before the acquisition.

The bank said it agreed to the settlement “to avoid the expense and distraction associated with litigating the case,” which also resolves litigation by bankruptcy trustees. “The settlement allows us to put all of these matters behind us,” the company said.

Countrywide hit the borrowers who were behind on their mortgages with fees of several thousand dollars at times, the agency said. The fees were for services like property inspections and landscaping.

Countrywide created subsidiaries to hire vendors, which marked up the price for such services, the agency said. The company “earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue,” the agency said in a news release.

The agency also alleged that Countrywide made false claims to borrowers in bankruptcy about the amount owed or the size of their loans and failed to tell those borrowers about fees or other charges.

15 Responses


    No, the 648 will not be taxed. But I made a mistake when I was typing it should have said “without taking out the costs” not the fees.. The fees are the $42m.

    Pretty sad, huh? I hope that the settlemetn agreement has some good provisions for the homeowners such they get the house free and clear. 🙂

  2. CIG HFI 1st Lien Mortgage- Anyone with info or papers with this represented to them by BofA or BAC that CIG HFI 1st Lien Mortgage is the investor of there loan, please let me know, I need help for a lawsuit. email info to

  3. whip

    That is what happens – the people get nothing. Nice settlement – for who?? the federal government??

    All these cases do is expose fraud – they do not help the people.

    angry & NOT TAKING IT

    You got it.

    And, “FTC officials emphasized the actions in the case took place before the acquisition.” Who are they trying to kid? Bank of America purchased loans from Countrywide.


    And will the $648.00 (without attorney fee calcs) be taxed????

  4. How in the Hell does anyone figure out how to reimburse the injured parties?? This happened on 10’s of 1000’s of loans!

    Does everyone get a check for $10 bucks a piece? The settlement should have been more like $108B for christ sakes!

  5. The whole “thing” comes down to one convergent point with a few a that particular point that will benefit from the action taken being a class action, or whatever else has been done, here are the true beneficiaries: AG’s, states, government,attorneys, attorneys and more attorneys. Have you ever watched vultures on a feeding frenzy? in this case you and I, the injured parties are their food, everybody benefits from a “settlement” except the real injured parties. Of what benefit is to us all this F+*&^ing “make believe we punish the bad guys” stunts? really, i mean really?. I’ll tell you what how much that benefits you and I: 0%, that’s how much. I agree with other bloggers here, the solely purpose of this whole ball of crap it’s to hash hash, the states, the judges and everybody else IN the biggest scam perpetrated on us the American people. To me the most painful thing it is to know that nothing will ever be done that legitimately would benefit us, the people at the end of the chain. I know some will as other already have become millionaires out of the scam. All this taunting moves by the government totally shock me! it’s totally adding insult to injury.God help us all.

  6. One west dba indymac sent me documents to get this….. Join a class action suit they sent me this. They said they were in settlement over a breach of fdcpa complaint … No kiddin!….and if I wanted to join in the payout I must sign and then I get 23 American dolllars well it’s better than euro…now if ibdidnt sign I waiver my rights. The tricks they play is never ending.

  7. hahaha !!
    if it fine was $108 billion it would still be a joke!
    this is…. hush $ ” please dont ask any questions fund”

  8. A class action lawsuit serves a purpose in that it collectively has more weight against a defendant, especially large and powerful corporations. It can bankrupt a company. I am thinking about the whole “breast implant” class action suit against Dow-Corning.

    However, as everyone correctly pointed out, it comes at a great risk to the individual person that has been harmed. In order to join a class-action, the individual litigants must give up their right to seek redress on their own. As a result, the attorneys in class actions reap the benefits. The larger the class the less each member of the class will receive once the case is settled.

    The amount of work and costs involved are huge to legal counsel but the rewards are equally huge if they prevail. So, from a cost benefit standpoint, if there is a large amount of people harmed, it would make sense to a law firm to file for class action status. For individuals, it is not the best way to proceed unless you simply don’t have the money, time or whatever to litigate on your own. So, it really depends on where you stand and what you hope to achieve.

    If you are not as interested in how much you will receive in the settlement but more focused on sending a clear message to the corporation, a class action may be the way to go. But if your purpose is to make yourself whole from the wrong doing you are much better off filing as a individual.

  9. Aline,

    Nice, can anyone say “unjust enrichment” on that??

  10. btw, I just did the calculations on this:

    $108,000,000 x 40% = 43,200,000
    108,000,000 – 43,200,000 = 64,800,000 divided by 100,000 participants = $648 to each participant.

    This does not include taking out the attorneys’ fees.


    You are so right that the monies obtained in a class action mainly go to the attorneys. A lot of people are under the mistaken impression that if there is class action, they will slam the bad guys – not so. Generally, whenever there is a settlement, the attorneys take their 40% or whatever their portion is, right off the top. Then they subtract their costs. Whatever is left over is then divided among the class participants.

    Class actions only benefit the attorneys.

  12. Yes – and this goes for civil class actions too.

    There was a huge recent mutli-district class action settlement for about seven million against Ameriquest/Argent. Homeowners each got about twenty dollars – the rest went to the attorneys..

  13. All these lawsuits are payoff’s for the states to keep their mouths shut and keep the judges in-line.
    I really feel that this is how they are playing the game. The AG’s sue and then settle with a wink, wink…..

  14. Out of all the cases “setteled” with them and all the money taken from them, i have yet to see any of it actually given to the people hurt by all this! It all just goes to the pockets of the Attorney Generals of the states that hop on board the money train.

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