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Bank of America to pay 108 Million to Countrywide Borrowers

Bank of America is to pay 108 MILLION dollars in settlements to about 200,000 borrowers. It was officially announced Monday by the Federal Trade Commission. Bank of America purchased Countrywide in July 2008. Countrywide was infamous for making risky loans to homeowners during the boom years.

Countrywide hit borrowers who were behind on their mortgages with fees of several thousand dollars at times. The fees were for such services as property inspections and landscaping that far exceeded market rates. Countrywide created subsidiaries to hire vendors, which marked up the price for such services, the FTC said.

The complaint also charges that in servicing loans for borrowers trying to save their homes in Chapter 13 bankruptcy proceedings, Countrywide made false or unsupported claims about the amounts they owed or the status of their loans. Furthermore, the FTC said Countrywide failed to tell borrowers in bankruptcy when new fees and escrow charges were being added to their loan accounts. And after the bankruptcy case closed and borrowers no longer had bankruptcy court protection, the FTC alleges that Countrywide unfairly tried to collect those amounts.

B of A did not admit or deny the charges, but said it agreed to the settlement “to avoid the expense and distraction associated with litigating the case.”

I guess Countrywide wasn’t on your side…