DEL.ICIO.USDow Jones Newswires
Published on: 02/27/08
PHILADELPHIA — Countrywide Financial Corp. has been reaping profits from "inflated, unverifiable or false" charges in foreclosure actions that threaten hundreds of thousands of homeowners, according to a lawsuit filed in federal court in Delaware.
The lawsuit, which seeks class-action status, takes aim at attorneys' fees, property inspection charges and other assessments that mount up once homeowners run into trouble paying their loans. Lawyers for homeowners say Countrywide is collecting far more than what it costs to enforce its rights as a lender.
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"The mortgage note says the lender shall be 'paid back' — those are the critical words, 'paid back' — for its costs of enforcement, so you would think that the borrower would have to reimburse their actual out-of-pocket expenses," said Jeffrey Norton, one of the attorneys who filed the suit Monday.
"But it's not what happens," he said. "We're alleging padded attorney fees, charges for appraisals that never happened, all kinds of made-up fees." Norton is with the firm of Harwood Feffer in New York.
A Countrywide official wasn't immediately available Wednesday to comment on the lawsuit, filed with the U.S. District Court in Wilmington, Del. The Calabasas, Calif., company, the country's biggest mortgage lender, is foreclosing on about 90,000 homes.
The suit adds to Countrywide's legal troubles, which include a probe of its treatment of bankrupt consumers by the Office of the U.S. Trustee, an arm of the Justice Department.
If certified as a class action, the suit could force Countrywide to prove the extra charges it added in "enforcement actions," from collection activities to foreclosure, were real, or give the money back to hundreds of thousands of homeowners.
With mortgage defaults at record levels and expected to rise, the case is one that will be closely watched by the law firms and others that are poised to profit from foreclosures that analysts predict will affect millions of homeowners in the coming years.
The suit was started by Gregory O'Gara, whose mother, Tamara Portnick, died after an illness during which she missed some payments on her Boynton Beach, Fla. home., according to Norton, O'Gara's attorney. O'Gara called Countrywide while clearing up his mother's estate and was told how much he would have to pay to bring the mortgage up to date.
"He did that, and then he started to think, 'This is only a short time. How can they have amassed all these fees?,'" Norton said. Investigation showed "Countrywide had done virtually nothing" to justify the extra charges it imposed on the deceased woman's estate, he said.
According to the lawsuit, Countrywide frequently charges $300 to $500 for appraisals that are not done at all, or that are mere "drive-by" inspections by appraisers who don't even stop their cars when passing mortgaged properties.
Countrywide has $300 to $500 "flat-fee" arrangements with law firms that handle foreclosures, the lawsuit says. Yet it hits homeowners with legal bills of $1,200 to $2,0000.
"The law firms are making a bundle," Norton said. "They frequently have a few attorneys who can go to court and a fleet of law clerks or paralegals who fill out forms. The law firms are probably the biggest beneficiaries of this wave of foreclosures."
Norton said Countrywide's mortgage is a contract that entitles it to recoup its costs if the loan starts to go south. When Countrywide charges more than it costs to enforce the loan, that's a breach of the contract, according to the complaint.
In a series of cases that also challenge the extra fees, a Delaware bankruptcy judge is weighing arguments from Countrywide and other lenders who say the mortgage is a contract that entitles them to impose the costs on bankrupt borrowers without the judge's approval.
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Comments
By brenda
Jun 20, 2009 4:00 PM | Link to this
I got mixed up with country wide 2 years ago we were looking for a house closer to job. we found our dream home the relator and broker fixed me up real good broker told them our income was 1000 more than the real amount. we filed chapter 7 and still couldn't afford mortgage payment we are still in house have 5 more months with redemption trying to short sell. i have tried to work with cw for 5 months on loan mod or refinance no luck just get people on phone who can't speak english or kids that are fresh out of high school to answer phone calls.totally stressed out and peed off!!! would like to sue them for the nervous breakdown i am having just dealing with the idiots. the obahma thing isn't the easist deal to get either it took some specialist over 21 hours to figure out how to do it and it still is not guaranteed.i am with jthom let them have it back and lose their butts. i have lost all i have ever worked for 50 years how depressing!!!
By Paula
Jun 19, 2009 12:45 AM | Link to this
I have been in & out of loan modification since august 2007. I can't believe there is not a class action lawsuit against CW yet. They drag the entire modification/foreclosure process out and add on fees, fees, and more fees. My house was sent to foreclosure while I was in loan modification also. I got an attorney who is no more successful than I. They did manage to keep me in my house for almost nine months now w/o making a payment. I don't know if it is worth fighting for, short selling, or walkin away?????
By kristen
Jun 10, 2009 9:30 PM | Link to this
I had a buyer ready to sign when I attempted to sell my home to avoid a forclosure and EVERY DAY I received a different payoff notice. We were told we couldnt sell because it was already in forclosure and that we had to pay $7,000 (and changing daily) in late fees and attorney fees.
I think there should be a class action lawsuit against this company. We got no where trying to work with loss mitigation and whoever else they decided to transfer us to. The title company and realtor got involved to try to push this sale through.
By Lucy
Jun 4, 2009 9:25 PM | Link to this
YES YES YES LOU DOBBS JUST ANNOUCED THAT FORMER CEO OF COUNTRYWIDE WAS ENDITED FOR FRAUD LEAKING STOCK TIPS AND SELLING 140 MILLION IN STOCK ANGELO MOZILO IT COULD NOT HAVE HAPPENED TO A NICER GUY. I AM STILL BATTLING FROM SEPT 2008
FOR MY REFINANCE I HOPE YOU ROT IN JAIL!!!
ANYTHING YOU GET IN JAIL YOU DESERVE..............THAT 140 MILLION COULD HAVE BEEN OUR REFINANCING MONEY!!!
By lostmyhome
May 11, 2009 1:11 PM | Link to this
"Countrywide has $300 to $500 "flat-fee" arrangements with law firms that handle foreclosures, the lawsuit says. Yet it hits homeowners with legal bills of $1,200 to $2,0000."
That's weird. Countrywide put me in foreclosure WHILE I was working on a loan modification. TWICE.
EACH time, they tacked on another $7000 in legal fees.
I am now totally in foreclosure, because Countrywide sold my mortgage and the new mortgage company immediately filed for foreclosure, and added another $8000 in legal fees. I had a $72,000 mortgage that has ballooned to $92,000 with legal fees added.
By Lucy
May 6, 2009 9:25 PM | Link to this
Hey we now have to refer to COUNTRYWIDE as BANK OF AMERICA.....ya know the one that is NOW ASKING FOR 34 BILLION DOLLARS from the government?????????? HUH?????????? With all these complaints it certainly looks like they are NOT paying out any mortgage monies. DOES THIS MEAN THAT BANK OF AMERICA needs to EAT all the bad mortgages from COUNTRYWIDE.
JUST GIVE ME MY 135,000 I AM EMPLOYED AND HAVE 50,000 EQUITY in my home.............NO I DON'T FIT THE PROFILE!!!!!!!!!
By tom ferge
May 4, 2009 2:57 PM | Link to this
Please I live In Mo, and that is exactly what happened to us''
Four years ago I borrowed $65,000 against my house that was paid for! And bought a fixer upper to buy and sell! After only three months of late or non-payment Countrywide filled papers for repo on my existing home, so I immediately reduced the price of the fixer upper to sell fast The day of closing we called countrywide for the actual pay off balance on that day, we sent them the check right after we closed for the amount in question. One month latter there calling to ask where our house payment was..And then said they were not paid off because of there foreclosure attorney fees were not added to the balance and gave us no price ,in which I would have paid immediately had I known the cost.
A couple more months go by with weekly calls from us complaining wanting the pay off, somebody told us, it was between $4,000 and 5,000 but that we could not do anything about it yet! Just keep making those same high payments even after sending them pay off check for $74,120 ,They lead us down a four to six month time frame of diversion and storytelling and us calling weekly , just getting different stories from someone different every dam time. Finally they gave us an unbelievable cost of $16,000 which devastated us and then they forced us into a loan modification deal and say we owe $16,000 more than the actual pay off they quoted us, this is madness. I recently even went to get cheaper financing to pay this off And they want to add an additional $2,700 for prepayment fee's please dear GOD somebody help..
I believe Countrywide while being overly expedient in trying to steal my house (30 days) used stalling tactics (6 months) to over inflate the foreclosure costs and enhance there portfolio of what is obviously Predatory lending practices at itsı best, and I am begging for legal assistance and will be searching every angle possible. I will be following all lawsuits against Countrywide and joining them or going on my own to file suite unless all debt if forgiven Please help !!!
Tom Ferge 602 S Beech st Savannah ,Mo 64485 . thmsferge@yahoo.com
Dear God help this is exactly what has happened to us .
By tom ferge
May 4, 2009 2:55 PM | Link to this
PleaseCountrywide mortgage are sick predators''
Four years ago I borrowed $65,000 against my house that was paid for! And bought a fixer upper to buy and sell! After only three months of late or non-payment Countrywide filled papers for repo on my existing home, so I immediately reduced the price of the fixer upper to sell fast The day of closing we called countrywide for the actual pay off balance on that day, we sent them the check right after we closed for the amount in question. One month latter there calling to ask where our house payment was..And then said they were not paid off because of there foreclosure attorney fees were not added to the balance and gave us no price ,in which I would have paid immediately had I known the cost.
A couple more months go by with weekly calls from us complaining wanting the pay off, somebody told us, it was between $4,000 and 5,000 but that we could not do anything about it yet! Just keep making those same high payments even after sending them pay off check for $74,120 ,They lead us down a four to six month time frame of diversion and storytelling and us calling weekly , just getting different stories from someone different every dam time. Finally they gave us an unbelievable cost of $16,000 which devastated us and then they forced us into a loan modification deal and say we owe $16,000 more than the actual pay off they quoted us, this is madness. I recently even went to get cheaper financing to pay this off And they want to add an additional $2,700 for prepayment fee's please dear GOD somebody help..
I believe Countrywide while being overly expedient in trying to steal my house (30 days) used stalling tactics (6 months) to over inflate the foreclosure costs and enhance there portfolio of what is obviously Predatory lending practices at itsı best, and I am begging for legal assistance and will be searching every angle possible. I will be following all lawsuits against Countrywide and joining them or going on my own to file suite unless all debt if forgiven Please help !!!
Tom Ferge 602 S Beech st Savannah ,Mo 64485 . thmsferge@yahoo.com
Dear God help this is exactly what has happened to us .
By John
Apr 19, 2009 7:31 PM | Link to this
Wow I am sad to see thet I'm not the only one. We have been fighting with CW for a while. Let me just say that we have been tru the horror stories too. After being out of work ofr over a year I got a great paying job 6 wks ago. CW was real happy but now they want a lump of $30k to reinstate my mortgage. I was told to wait for the Fannie Mae program letter. After I followed everything in the letter, they told me taht they no longer use that program. But they were not proactive about it. I a=called for a week after I faxed in everything the letter requested. It was then I was told it was a waste of time.
Next they told me to wait for the loan modification documents that were mailed out on the previous Tuesday. A week later no one ever heard about either the Fannie Mae or Home Modifaction documents pertaining to my loan. It just goes on and on.
We have been told so many different stories by so many different CW employees. I think they are trained to give us the run around. It is so extreme that I would not have believed it had I not lived it for myself.
By Toni
Apr 19, 2009 4:21 PM | Link to this
What a disgrace CW is! Due to medical problems we were 2 months behind and was assigned a resolution manager. My original loan was $1396 month..now he said we can be on a payment plan, due the 20th of each month at $1771 per month for 9 months. We are on our third installment, but however we have been receiving foreclosure notices continuously. If there is a class action suit anywhere or a nice brave lawyer out there who will take this case, please let us know. I have asked in writing that they acknowledge our payment pkan and they just send letters stating to call their customer service reps. Please.. you're on hold for a very long time..they have no answers..oh yes, one said ignore the foreclosure notices, throw them out! I asked to speak with supervisor.."She's not at her desk, leave a voicemail...well wouldn't u know it, they hung up on me instead. Someone has got to help us out!!The american dream is now the American NIghtmare.
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