Countrywide agrees to settlement in Pa. probe

PITTSBURGH - Countrywide Home Loans Inc. has agreed to pay a Chapter 13 bankruptcy trustee $325,000 to settle allegations that the mortgage lender sought improper fees or payments from bankrupt homeowners and otherwise violated bankruptcy court orders and regulations in nearly 300 cases.

The settlement, terms of which were filed with the court this week, must be approved by U.S. Bankruptcy Court Judge Thomas P. Agresti. A hearing on the matter was scheduled for Aug. 11.

In court filings last year, Chapter 13 trustee Ronda J. Winnecour sought to compel Countrywide to provide loan histories in 293 cases and asked for sanctions against the company for losing or destroying checks paid by homeowners in foreclosure.

Countrywide acknowledged errors in handling some debts, but it had denied any systematic effort to thwart bankruptcy protections to collect money. The company, which earlier this month was bought by Charlotte-based Bank of America Corp., agreed to the settlement with Winnecour in June.

Officials with Bank of America said they couldn't comment on the settlement because it is still pending approval by the judge. Officials with the trustee's office did not immediately return a call for comment Wednesday.

Under the terms of the settlement, Countrywide agreed to reconcile its records with the trustee's in regards to the amounts owed them by the 293 borrowers in the case. If the figures aren't in agreement, Countrywide can either change its figures to agree with Winnecour's or show reason why her numbers are inaccurate, according to terms of the settlement.

Of the 293 cases, one involved homeowners Rodney and Lori Thompson, who had claimed that Countrywide overcharged them for escrow to cover property taxes and insurance. In the settlement, Countrywide agreed to nullify the money they claimed the Thompsons owed them, as well as waive future escrow requirements and pay their attorneys fees.

Countrywide and other mortgage companies, and the fees they charge, have come under increased scrutiny amid a surge in home loan defaults among borrowers with poor credit histories. The company, formerly based in Calabasas, Calif., had been sued by several states over its lending practices.

The lender had sought to address the growing number of defaults on its books by modifying loan terms, working out long-term repayment plans and other actions.