FTC Sends Out $108 Million In Refund Checks To Overcharged Countrywide Customers

Earlier today, the Federal Trade Commission announced it is mailing out refund checks to the nearly half million American homeowners who were charged excessive fees on their mortgages by former Worst Company In America champ Countrywide Home Loans.

In total, the FTC says 450,177 people will receive refund checks totaling around $108 million.

“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.”

These payments are a result of the June 2010 settlement reached with the FTC.

In its investigation, the commission found that Countrywide had created a subsidiary to provide services — like lawn mowing and property inspections — meant to maintain the value of a property in default. While that’s all perfectly legal, what’s not legal is to mark up the costs of those services — by up to 100% in some cases — and then pass the increased costs on as fees.

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.

In May, we asked a source at the FTC about why these settlement checks hadn’t been mailed out. Apparently, the long delay was due to the indecipherable paperwork turned over by Countrywide.

The refund checks will be distributed to consumers whose loans were serviced by Countrywide between January 1, 2005, and July 1, 2008, and who paid such marked-up fees.

The amount of each check will vary from less than $500 to as much as several thousand dollars. 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 web page.

TC Returns Nearly $108 Million to 450,000 Homeowners Overcharged by Countrywide for Loan Servicing Fees [FTC press release]

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