Countrywide Admits Errors at Senate Hearing

WASHINGTON -- The mortgage lender Countrywide Financial, which is accused of inflating certain borrowers’ fees, acknowledged on Tuesday that it had made errors and pledged to take steps to improve its operations, The Associated Press reported.

Steve Bailey, chief executive for loan administration at Countrywide, told a Senate panel that the company’s loan officers had made mistakes “from time to time.” He said that the company would hire an outside auditor to review its actions in cases involving homeowners who have filed for bankruptcy court protection, the AP reported.

“Servicers have also been accused of intentionally assessing inappropriate fees and costs to borrowers in bankruptcy,” Bailey said, according to the AP. “With respect to Countrywide, these allegations are simply not true.”

But Katherine M. Porter, a professor at the University of Iowa, testified that mortgage companies and servicers had improperly sought payments without fully disclosing or documenting fees. In some cases, she said, companies have sought to foreclose on homes even after borrowers discharged their debts through the Chapter 13 bankruptcy process, which allows debtors to keep their homes while working out payment plans, the AP reported.

Senator Charles E. Schumer, the Democrat of New York who heads the panel, criticized what he called a “vulture mentality” in the mortgage industry, the AP reported.

-- NYSSCPA.org News Staff

Posted on 5/7/08