Washington — Facing criticism from a Georgia family and senators of both parties, a Countrywide Financial Corp. executive said Tuesday that the company had a new plan to keep mortgage processing errors from harming homeowners.

But Steve Bailey's testimony before the Senate Judiciary Committee could not shift the spotlight away from the giant lender's role in the loss of the Atchley family's home.

RICK MCKAY/RICK MCKAY/ Cox News Service (ENLARGE)

Robin Atchley introduces her family to Senate Judiciary subcommittee chairman Charles Schumer, D-NY, left, before the start of the hearing on abuses of the bankruptcy process by mortgage lenders. From left, Schumer, Morgan, 5, husband John, son Alec, 11, and attorney Howard Rothbloom.

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Robin and John Atchley and their four young children, hair combed and pants pressed Sunday-morning straight, sat before the senators to explain how their foreclosure came about.

In the wood-paneled and green marble hearing room, the cameras clicked away at Kally, 14; Payden, 12; Alec, 11, and Morgan, 5. The children watched from the first row as their mother raised her right hand to swear to tell the truth.

No one at Countrywide "could ever give us clear information on what they claimed that we owed and why we owed it," Robin Atchley said. "It was as if all they wanted was to take our house."

The family's odyssey to Washington began nearly three years ago, when Atchley's sister died. Atchley, 34, a U.S. Postal Service letter carrier, took an unpaid leave of absence to grieve. Her husband, John, continued to work as a power company lineman, but they fell three payments behind on their home in Waleska.

They had put down $22,000 for the home in rural Cherokee County and had no intention of walking away, she said. But the more they tried to catch up with what they owed, the more their mortgage servicer, Countrywide, piled on fee after fee with no clear explanations, she said.

Finally, the family filed for a financial reorganization through bankruptcy court, hoping to straighten out their debts and get right with Countrywide. Instead, "legal papers became weapons," Atchley said. Countrywide's effort to foreclose upon their home "was unforgiving."

Last May, they surrendered. "It was our dream home," she said. "But, regretfully, John and I decided that it would be best to sell it" to get away from Countrywide.

"The saddest day was the day that we told our children to pack everything in their bedrooms," she said. The family "moved in with my parents until we could save enough money to rent."

But that was only the beginning of a fight to change the way mortgage companies can load up fees on borrowers. The Justice Department's U.S. Trustee in Atlanta, which oversees the integrity of the bankruptcy system, went to court in February seeking sanctions against Countrywide for its actions against the Atchley family.

The company is facing a wave of lawsuits accusing it of keeping records poorly and abusing the bankruptcy and foreclosure processes.

Now Congress wants to use the Atchleys' plight as a catalyst for toughening regulation of mortgage servicing companies such as Countrywide, where Bailey is the chief executive for loan administration.

Bailey said that keeping track of mortgage payments can be complicated, especially once a borrower has filed for bankruptcy protection. "This type of processing can result in some mistakes from time to time," he said.

Countrywide would take the steps necessary to reduce "avoidable errors," he said. The company has promised to use an outside auditor to check a random sample of bankruptcy cases for accuracy, to appoint a bankruptcy ombudsman to answer questions about fees, and to adopt the "best practices" recommended by U.S. Trustees.

U.S. Sen. Charles Schumer (D-N.Y.), chairman of the subcommittee on court oversight, was unimpressed by Countrywide's arguments. He told Bailey that among the causes of the nation's foreclosure crisis, "you're way at the top of the list."

He said the company's "vulture mentality" boosted foreclosures. "Companies know that the hapless homeowner is too poor, too unsophisticated or too overwhelmed to challenge often blatantly fraudulent demands for payment," he said.

The outrage was bipartisan.

U.S. Sen. Jeff Sessions (R-Ala.) told the Countrywide executive that "it's not enough to say you're sorry after you get caught" piling on inappropriate fees.

When the committee took a break for a Senate vote, Schumer approached the Atchleys to tell the children they should be proud of their parents.

"We're going to try to pass some laws," he said.