Justice Department Will Investigate Countrywide's Lending Practices

A judge has authorized an investigation into Countrywide’s lending practices, says the NYT.

Judge Thomas P. Agresti of the Federal Bankruptcy Court in Pittsburgh on Tuesday approved an inquiry into “the impact of Countrywide’s bankruptcy procedures on the integrity of the bankruptcy process” by the Office of the United States Trustee, a Justice Department arm that polices bankruptcy filings.

Judge Agresti dismissed Countrywide’s protests that authorizing an investigation by the trustee’s office could have “staggering implications” for other big mortgage lenders by starting an investigatory “free for all.”

He said an investigation was warranted because the trustee’s office had demonstrated “a common thread of potential wrongdoing” in several bankruptcy filings involving Countrywide.

The trustee’s office has asserted that it needed to look into accusations that Countrywide had chronically mishandled mortgage payments, pumped up bills with improper fees and charges and ignored court orders while pursuing troubled consumers.

Countrywide denies that the mistreatment of homeowners is a “feature of its mortgage processing backroom systems.” We can’t help but point out that if you have to hire lawyers to help you deny that your incompetance is a “feature,” you are officially really bad at your job.

Court Approves Review of Countrywide Practices [NYT]
(Photo:meghannmarco)

Comments

Edit Your Comment

  1. cashmerewhore says:

    Grrr. I have a late pay from Countrywide misapplying a payment. I contacted them, they insist they didn’t report it. It’s on my credit.

    Good thing I don’t plan to sell for another 5 years….

  2. winstonthorne says:

    I can’t help it Officer, going 80 in a 50 is a feature of my driving system.

  3. philipbarrett2003 says:

    I love this one – “staggering implications” for other big mortgage lenders by starting an investigatory “free for all.”

    And homicide investigations open a “free for all” aimed at ALL murderers?

  4. lightaugust says:

    Is this story filed under ‘shady’ for Countrywide or the Justice Dept.?

  5. ARP says:

    @lightaugust: Exactly. My guess is that they’ll indict to show they mean business. A few middle-upper people will do a short amount of time in Club Fed and that will be that.

    Or perhaps the DOJ will do what they did with polluters, which is to fine them a very small amount and then have them promise never to do that sort of thing again.

  6. SactoKev says:

    Shocker…just like a recent WSJ headline: “Countrywide Loans May Show Irregularities,” or something of that nature. Raise your hand if you find that surprising.