FTC Orders BOA/BAC to pay $108 Million to 450,000 Homeowners Overcharged

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see 8.04.2011 BAC-Home.Countrywide Consent Order

see 8.04.2011 BAC-Home.Country.COMPLAINT-FTC

BOA Ordered to Comply With Law and Specify Who is Charging For Fees and What the Fees are For

 EDITOR’S NOTE: As described below, the consent order does much more than give money back to people. It specifically states that BAC/Countrywide cannot misrepresent the status of the loan, the amounts due and all the other shenanigans that have been played on both borrowers and investor/lenders.

   3.    “Bank” shall mean a bank that is exempt from the FTC’s 14 jurisdiction pursuant to Section 5(a) (2) of the FTC Act, 15 U.S.C. 15 § 45 (a) (2), including Bank of America, N.A. “Bank” shall not 16 include any Person or entity controlled directly or indirectly by a 17 bank and that is not itself a bank, such as an operating subsidiary 18 or Affiliate of a bank that is not itself a bank;

“BAC Home Loans Servicing” shall mean BAC Home Loans Servicing, LP, formerly doing business as Countrywide Home Loans Servicing, LP, and its successors and assigns, by whatever names they might be known, but not including any Bank

“Default-Related Service” shall mean any service ordered 8 as a result of a consumer’s payment default on a Loan, for the 9 purpose of protecting the note holder’s interest in the property and rights under the security instrument, for which the Loan account is 11 charged a Fee (e.g., services of a type currently or in the future 12 provided by BAC Field Services Corporation, Landsafe Default, Inc., 13 and the trustee-services business of ReconTrust Company, N.A., such 14 as property inspections, property preservation, broker’s price
15 opinions, title searches and reports, and foreclosure trustee 16 services);
entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, directly or through any corporation, subsidiary, division, or other device, are hereby permanently restrained and enjoined, in connection with the Servicing of any Loan in default or Chapter 13 Bankruptcy, from:

Misrepresenting, expressly or by implication, the status of the Loan or amounts owed on the Loan, including but not limited to the amount of any Monthly Payment, Fee claimed or assessed, Escrow Shortage, or Escrow Deficiency; Misrepresenting, expressly or by implication, that any payment or Fee is allowed under the Loan Instruments or permitted by law; Misrepresenting, expressly or by implication, the amount, nature, or terms of any Fee or other condition or requirement of any Loan; and Making any representation, expressly or by implication, about the status of the Loan, amounts owed on the Loan (including but not limited to the amount of any Monthly Payment, Fee claimed or assessed, Escrow Shortage, or Escrow Deficiency), the date that any payment or Fee is
Case 2:10-cv-04193-JFW -SS    Document 6    Filed 06/15/10    Page 6 of 25
IT IS THEREFORE ORDERED that Defendants, their officers, 7 employees, agents, representatives, and all other Persons or entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, directly or through any corporation, subsidiary, division, or other device, are hereby permanently restrained and enjoined, in connection with the Servicing of any Loan in default or Chapter 13 Bankruptcy, from:

A. Misrepresenting, expressly or by implication, the status of the Loan or amounts owed on the Loan, including but not limited to the amount of any Monthly Payment, Fee claimed or assessed, Escrow Shortage, or Escrow Deficiency;
B. Misrepresenting, expressly or by implication, that any payment or Fee is allowed under the Loan Instruments or permitted by law;
c. Misrepresenting, expressly or by implication, the amount, nature, or terms of any Fee or other condition or requirement of any Loan; and
D. Making any representation, expressly or by implication, about the status of the Loan, amounts owed on the Loan
(including but not limited to the amount of any Monthly Payment, Fee claimed or assessed, Escrow Shortage, or Escrow Deficiency), the date that any payment or Fee is due, or any other information regarding the terms or conditions of a Loan, unless, at the time of making such representation, such Persons possess and rely on Competent and Reliable Evidence that substantiates that the representation is true.

If the consumer’s Loan goes into default and prior to assessing any Fees for Default-Related Services, Defendants’ notice of default shall disclose (1) any use of Affiliates for Default-Related Services; (2) if Fees are assessed for those services; and (3) a link to a schedule of Fees for those services (“Fee Schedule”) on Defendants’ website(s).
E. Misrepresenting, expressly or by implication, the status of the Loan or amounts owed on the Loan, including but not limited to the amount of any Monthly Payment, Fee claimed or assessed, Escrow Shortage, or Escrow Deficiency; Misrepresenting, expressly or by implication, that any payment or Fee is allowed under the Loan Instruments or permitted by law; Misrepresenting, expressly or by implication, the amount, nature, or terms of any Fee or other condition or requirement of any Loan; and Making any representation, expressly or by implication, about the status of the Loan, amounts owed on the Loan

FTC Returns Nearly $108 Million to 450,000 Homeowners Overcharged by
Countrywide for Loan Servicing Fees

The Federal Trade Commission is mailing 450,177 refund checks worth
almost $108 million to homeowners who were allegedly overcharged by
Countrywide Home Loans, Inc. As part of the FTC’s efforts to protect
financially distressed homeowners, the FTC reached a settlement with
Countrywide last year over allegations that the company collected
excessive fees from borrowers who were struggling to keep their homes.

“It’s astonishing that a single company could be responsible for
overcharging more than 450,000 homeowners,” FTC Chairman Jon Leibowitz
said. “Countrywide’s unconscionable behavior harmed American consumers
on a massive scale and we are proud to be getting every single dollar
back to hundreds of thousands of struggling consumers who can least
afford to lose the money.”

The FTC’s June 2010 settlement order required Countrywide, which is
now owned by Bank of America, to pay $108 million to be used for
refunds and barred the company from taking advantage of borrowers who
have fallen behind on their payments. The refunds are being
distributed to consumers whose loans were serviced by Countrywide
between January 1, 2005, and July 1, 2008, and who were subject to the
company’s allegedly unlawful practices.

According to the FTC, homeowners who were in default on their loans
were charged excessive fees for services such as property inspections,
lawn mowing, and other services meant to protect the lender’s interest
in the property. Rather than simply hire third-party vendors to
perform the services, Countrywide used subsidiaries to hire the
vendors. The subsidiaries allegedly marked up the price of the
services charged by the vendors – often by 100 percent or more – and
Countrywide then charged the homeowners the marked-up fees. The FTC
complaint alleges that the company’s strategy was to increase profits
from default-related service fees in bad economic times.

Also, in servicing loans for borrowers trying to save their homes in
Chapter 13 bankruptcy proceedings, the FTC alleged that Countrywide
made false or unsupported claims to borrowers about amounts owed or
the status of their loans, and added fees and escrow charges to their
mortgage accounts without notice.

An administrator working for the FTC will send out refunds to
consumers who were overcharged for property inspections, maintenance
services, title searches, and foreclosure trustee services, and to
those who were in Chapter 13 bankruptcy, and were charged fees or
escrow charges without being notified.

Consumers who receive the checks should cash them by September 19,
2011. The amount of each check will vary from less than $500 to as
much as several thousand dollars. The FTC never requires consumers to
pay money or provide information before redress checks can be cashed.
Former Countrywide customers with questions should call the redress
administrator, Gilardi & Co., LLC at 1-888-230-3196 or visit the FTC’s
Countrywide settlement webpage.

The Federal Trade Commission works for consumers to prevent
fraudulent, deceptive, and unfair business practices and to provide
information to help spot, stop, and avoid them. To file a complaint in
English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into
Consumer Sentinel, a secure, online database available to more than
2,000 civil and criminal law enforcement agencies in the U.S. and
abroad. The FTC’s website provides free information on a variety of
consumer topics. Like the FTC on Facebook and follow us on Twitter.

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
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