Court Approves Review of Countrywide Practices

PHILADELPHIA -- A federal judge has authorized an examination of the mortgage processing systems of the lending giant Countrywide Financial by bankruptcy investigators, according to Dow Jones and the Associated Press. Those investigators are reportedly seeking evidence that the company systematically abuses borrowers.

Judge Thomas P. Agresti of the Federal Bankruptcy Court in Pittsburgh on Tuesday approved an inquiry by the Office of the United States Trustee, a Justice Department arm that polices bankruptcy filings, the AP and Dow Jones reported.

He reportedly said an investigation was warranted because the trustee’s office had demonstrated “a common thread of potential wrongdoing” in several bankruptcy filings involving Countrywide, according to the AP and Dow Jones.

The trustee’s office, according to the AP and Dow Jones, has asserted that it needed to look into accusations that Countrywide had chronically mishandled mortgage payments, pumped up bills with improper fees and charges and ignored court orders while pursuing troubled consumers. Countrywide has reportedly acknowledged some errors, but denies that mistreatment of homeowners is a feature of its mortgage processing backroom systems.

-- NYSSCPA.org News Staff

Posted on 4/3/08