Countrywide Financial (NYSE: CFC) shareholders may be able to take some level of comfort in the fact that apparently they're not the only ones being treated like crap by the beleaguered mortgage giant.
According to the Associated Press, "U.S. trustees in Georgia, Ohio, and Florida on Thursday asked the courts to enjoin 'Countrywide's sustained bad faith conduct' in its treatment of distressed consumers trying to save their homes in bankruptcy court, according to a complaint filed by U.S. Trustee Donald F. Walton."
Walton wrote that "Countrywide's failure to ensure the accuracy of its claims and pleadings has resulted in an abuse of the bankruptcy process." The company is accused of filling bankruptcy proceedings with mishandled payments, unexplained or erroneous fees, and inaccurate paperwork.
Courts in Pennsylvania, Texas, and North Carolina have previously imposed punitive damages on the company for misconduct in bankruptcy cases.
The Wall Street Journal reports (subscription required) that the Countrywide deal has been a lightning rod for Bank of America (NYSE: BAC), which is set to close the deal in the third quarter.
The possible legal, regulatory, and financial hassles aside, I think that Bank of America has to wonder what exactly they're getting here. Countrywide Financial is being acquired presumably for its strong brand and network, but you have to think all these accusations of sleaze and extremely negative media coverage (I'm proud to say I've contributed my fair share) are doing a lot to hurt the brand.
And from this latest bit of news, it doesn't seems like those problems are going away anytime soon.











Reader Comments (Page 1 of 1)
3-01-2008 @ 1:56PM
Neuticles said...
I have one of their infamous ARMs and after six months of trying to get a 30 year fixed was approved- with a $7900 closing cost. Cme closing day they came by with 3 inches of paperwork- insisting that they be signed on the spot without review. When it got to the 'terms" page it was clearly stated that it was another ARM- a duplicate loan that I was attempting to get out of. It boiled down to pure trickery. I told them to get the hell out of my home and got what I needed from anohter reputable lender. Countrywide is rotten to the core- pure crooks.
3-01-2008 @ 3:12PM
Mel Strickland said...
All the big lenders and banks are owned by the
Mafia. I could document this but why should I?
Nobody is going to do a thing about it anyway.
Especially that crowd in Washingto who is getting
their cut.
J. Stone