More than 450,000 borrowers who took out mortgages with Countrywide Financial Corp. will soon receive refund checks as part of a $108 million settlement over claims that the lender charged high fees to borrowers facing foreclosure, the Federal Trade Commission reports.
FTC has accused Countrywide of marking up prices by charging borrowers who were behind on their mortgages with fees that were sometimes thousands of dollars and that far exceeded market rates. FTC also accused Countrywide of making false claims to some borrowers about how much they owed on their mortgage and adding fees and other charges to borrowers' mortgage accounts without any notice.
About 347,000 borrowers who overpaid loan default fees will be fully reimbursed, according to FTC. Another 102,000 borrowers who filed for Chapter 13 bankruptcy protection will be able to split the remaining settlement that is left. Refunds will be provided to consumers with loans serviced by Countrywide between Jan. 1, 2005, and July 1, 2008. Refunds will be anywhere from $500 to several thousand dollars.
The refunds are part of a settlement agreement FTC and Bank of America Corp., which acquired Countrywide in 2008, reached last year.