Foreclosure tricks cost Countrywide $108 million!

NEW YORK (CNNMoney.com) -- Mortgage lender Countrywide Home Loans Inc. agreed to pay $108 million Monday to settle government claims that it charged homeowners facing foreclosure inflated service fees.

The settlement with the Federal Trade Commission, one of the largest imposed in an agency case, will reimburse overcharged borrowers whose loans were serviced by Countrywide before it was acquired by Bank of America (BAC, Fortune 500) in July 2008

"Life is hard enough for homeowners who are having trouble paying their mortgage," said FTC chairman Jon Leibowitz. "To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible."

According to the FTC, Countrywide ordered homeowners that fell behind on their mortgages to pay for default-related services like property inspections and lawn mowing to protect the lender's interest in the property.

While that's typical under most mortgage contracts, the FTC alleged, Countrywide created subsidiaries that marked up prices for the services by 100% or more in some cases.

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"As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it create solely to generate revenue," the FTC said.

Further, Countrywide made false claims to borrowers that were trying to save their homes in Chapter 13 bankruptcies and failed to inform them about new fees and escrow charges, which it tried to collect after borrowers were no longer protected by bankruptcy, sometimes through foreclosure, according to the FTC.

Bank of America said in a statement that "no legacy Bank of America transactions are included in the monetary settlement."

Rather, the settlement allows Bank of America "to avoid the expense and distraction associated with litigating the case" and "put all of these matters behind us."

CALL NAFMA TODAY to find out if you were one of the millions of homeowners swindled into paying inflated service fees to a wolf in sheeps clothing like Countrywide or Bank of America. NAFMA's team of Mortgage Analysts are experts at uncovering violations of RESPA, TILA, HOEPA and various other consumer protection acts that were put in place to protect you from unscrupulous lenders like Countrywide. Call NAFMA NOW for a FREE consultation and preliminary loan evaluation! The number is Toll FREE: (888) 351-7779. Dial extension 227 for the Research Department. We welcome the opportunity to help you.