The Federal Trade Commission [FTC] said Monday that Bank of America’s Countrywide (BAC) will pay $108 million to settle charges that its companies collected excessive fees from borrowers who were struggling to keep their homes.
The settlement represents one of the largest judgments imposed in an FTC case, and the largest mortgage servicing case, according to the commission. The funds will be used to reimburse overcharged homeowners whose loans were serviced by Countrywide before it was acquired by Bank of America in July 2008.
According to the complaint filed by the FTC, Countrywide’s loan-servicing operation deceived homeowners who were behind on their mortgage payments into paying inflated fees – fees that could add up to hundreds or even thousands of dollars.
“Life is hard enough for homeowners who are having trouble paying their mortgage. To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible,” said FTC Chairman Jon Leibowitz. “We’re very pleased that homeowners will be reimbursed as a result of our settlement.”