Friday, March 7, 2008

Countrywide Avoids Punishment in Case

Wall Street Journal (03/06/08) P. B2; Brickley, Peg
A federal bankruptcy judge in Houston says Countrywide Financial Corp. and its lawyers mishandled the mortgage of a Willis, Texas-based homeowner by imposing improper or unexplained fees and incorrectly applying monthly mortgage payments to the homeowner's pre-bankruptcy debt. While Judge Jeff Bohm said the lender and its lawyers displayed "a disregard for the professional and ethical obligations of the legal profession and judicial system," he did not levy any fines. Bohm blamed communication problems and a "confusing" corporate culture for the errors. Countrywide said it will improve its policies and procedures in response to the ruling and has, among other things, "provided for greater checks and balances in its bankruptcy review process and is exploring additional technology solutions to avoid the individualized errors that were the subject of the court's ruling."

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