Bank of America has agreed to pay $108 million to settle federal charges involving excessive fees charged to borrowers facing foreclosure, the Associated Press reported. The allegations were levied against Countrywide Financial Corp., which Bank of America purchased nearly two years ago.
This is yet another case where banks have been caught taking advantage of borrowers. Hiring a trial lawyer is your best option to stop foreclosure in Miami. Borrowers should seek legal help to protect their rights as a homeowner. We offer foreclosure help in Miami and throughout South Florida. Other tactics banks use include sloppy paperwork and missing promissory notes. In a foreclosure proceeding, a bank has the burden of proof. A comprehensive discovery investigation conducted by an experienced Miami foreclosure attorney is the best way to stop a foreclosure.
Countrywide’s misconduct has reached near legendary status. Last year, the top three executives of the company were charged with civil fraud and insider trading by the Securities and Exchange Commission. In this case, the $108 million settlement seeks to refund money to about 200,000 borrowers. It is the largest mortgage industry settlement ever obtained by the Federal Trade Commission.
FTC Chairman Jon Leibowitz accused Countrywide of “callous conduct, which took advantage of consumers already at the end of their financial rope.”
Countrywide slapped borrowers who were behind in their mortgages with several thousand dollars worth of fees at a time. The fees included charges for property inspections and landscaping that were far above market rates; the company created subsidies to hire vendors and marked up the prices of the services.
“Countrywide profited from making risky loans to homeowners during the boom years, and then they profited again when the loans failed,” Leibowitz said. It could take months to contact affected borrowers; authorities describe Countrywide’s record keeping as “beyond abysmal.”
Consumer advocates allege banks have not done enough to prevent foreclosures precisely because of the profits involved in collecting such fees — Countrywide even identified it as “part of our diversification strategy” as foreclosures soared.
Countrywide is also accused of making false claims to borrowers in bankruptcy about the amount owed on their loans and failing to tell borrowers about fees and other charges. The settlement requires Bank of America to notify bankrupt borrowers about what they owe on a monthly basis.
Our firm can help avoid foreclosure in Miami and throughout South Florida. Contact Barakat, Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 350-5055.