Bank of America’s Countrywide Mess Continues

Financial Justice Foreclosure

predatory-lending-3Sheridan I’ll be honest.  I may be missing some of the news, since I’m spending the daylight hours pulling a post-Katrina trailer to Montana, but can it really be possible that a $624 million dollar settlement on yet more of the Countrywide fiascos has literally attracted virtually zero notice in the news?   This $624 Million comes on top of a $100 Million deal with the Federal Trade Commission in June for having fleeced homeowners by adding bills and scamming on their foreclosures.  We still have the SEC suit against Angelo Mozillo, the CEO and founder, so what will be the final price tag for all of this mess?

The answer may be coming but first the news:

NEW YORK, Aug 2 (Reuters) – A federal judge has granted preliminary approval to Bank of America Corp’s and KPMG LLP’s $624 million settlement of a lawsuit alleging that Countrywide Financial Corp investors were misled about the mortgage lender’s lending practices.
Bank of America, which owns Countrywide, agreed in May to pay $600 million to resolve the class-action litigation. KPMG, which audited Countrywide, agreed to pay $24 million.
U.S. District Judge Mariana Pfaelzer granted preliminary approval to the settlement at a hearing on Monday in Los Angeles federal court, according to Joel Bernstein, a lawyer for the investors.
The judge indicated that a final fairness hearing on the settlement will likely be held on Nov. 15, Bernstein added.
The case was led by several pension funds, including the New York State Common Retirement Fund, that state’s $132.5 billion public pension fund, and five New York City pension funds. It was brought on behalf of investors in Countrywide securities between March 2004 and March 2008.
Countrywide was the largest U.S. mortgage lender before Bank of America bought it for $2.5 billion in July 2008.

We still have no idea about the final price tag of the Countrywide fiasco, because none of these settlements really give any relief to the millions of homeowners facing foreclosures with Countrywide loans!  This is especially true because Bank of America, while agreeing to pay the piper on some of the cleanup, has been totally foot dragging on any real foreclosure modification program, while keeping a former Countrywide top official in charge of this program – talk about foxes in the hen house.

I hate to estimate the number of billions – yes, billions! – that the federal government has now paid via Fannie Mae and Freddie Mac to pay for Countrywide foreclosures.  They were the biggest lender.  The total bill is likely to be a trillion.  Let’s guess:  how about $500 billion (yes, billion!).

And, still no justice or relief Bank of America (nee Countrywide) mortgage holders trying to keep their homes.