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Wilmington, North Carolina

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Gary Shipman
Gary Shipman
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Countrywide, Nation's Largest Mortgage Lender, Sued for Fraud

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Countrywide Financial, the nation’s largest mortgage lender, charged borrowers excessive and unreasonable fees to borrowers facing foreclosure, according to a lawsuit filed in Delaware on Monday.

The action alleges that Countrywide profitted from the excessive fees in order to compensate for its losses in the subprime loan default crisis. While typical mortgage agreement permit Countrywide to charge fees incurred for bringing loans current, the action alleges that the amounts charged by Countrywide were “excessive, unverified and unreasonable.”

Millions of homeowners across the United States face foreclosure by reason of having obtained mortgage loans at high interest rates that they can no longer pay. Losses by Countrywide because of the loans that it made have resulted in additional lawsuits against Countrywide by investors, who contend that Countrywide issued false and misleading statements to inflate share prices. The latest action charges that Countrywide’s conduct simply adds further insult and injury to consumers who already face the loss of their home.

Homeowners facing foreclosure should understand that there are options and alternatives available. Lenders who engaged in conduct that was unlawful under State or Federal law can be enjoined from proceeding with its foreclosure action until those issues are fully litigated. Some lenders have routinely violated State and Federal law, including charging excessive fees and interest rates, and consumers must take a proactive approach in having their particular transaction investigated by a competent attorney to see if defenses to foreclosure are available. Remedies available to consumers vary, but statistics demonstrate that when violations exist and foreclosure actions are vigorously defended, homeowners keep their homes; loans are “rewritten”; and excessive fees charged to consumers are refunded.