Get Help from FTC Regarding California Mortgage Foreclosure Laws
The California mortgage foreclosure laws got a bit of assist from the Federal Trade
Commission (FTC) on Monday when it ordered two of Countrywide's home loan servicing firms, who are now part of Bank of America Home Mortgages, to pay $108 million in settlement fees to their borrowers. This payment is the result of Countrywide charging excessive fees from cash-strapped borrowers who were struggling to keep their houses. This is one of the largest judgments ever imposed in an FTC case. In a released statement, the FTC stated the $108 million settlement will reimburse overcharged home owners whose financial loans were serviced by Countrywide. According to the FTC, Countrywide employed illegal practices in servicing homeowners' mortgages, violating Federal and California mortgage foreclosure laws. The California mortgage foreclosure laws work in tandem with Federal laws, and in this scenario, Californian debtors obtained some needed support from the FTC.
California Mortgage Foreclosure Law Violations
Countrywide has allegedly been charging excessive fees for default-related services which are heavily concentrated in California. Countrywide was accused of making false claims about the amounts owed by home owners in bankruptcy, making use of volumes that couldn't be backed up. Countrywide also allegedly didn't inform individuals going through bankruptcy when new fees or charges were currently being added to their financial loans.
New Precedent Established For California Mortgage Foreclosure Laws
Going forward, borrowers in Chapter 13 bankruptcy should be sent a monthly notice with details about the amounts that are owed - including any charges assessed during the prior month. In addition, Countrywide should guarantee the accuracy and completeness of the information they use to service loans in Chapter 13 bankruptcy. These requirements set precedent, having the effect of supplementing California mortgage foreclosure laws.
"Clearly, Bank of America (Countrywide) got caught, which is why they agreed to this settlement. It goes to show that, for the lenders, it is all about the money and their concern for the customer is secondary at best. Some loan providers will do what ever they will need to do to squeeze out much more income without worry for how it affects their customers."
In separate reports, it has been obviously documented how loan providers are making use of a campaign of fear and guilt to keep house owners having to pay their mortgages, even when the loan company understands that the property owners can't manage the payments.
"This is a strategy to bleed the home owners dry. When the property owners are fully depleted of their funds, the loan company forecloses. This is a strategy that maximizes the lenders' earnings, but shows zero concern for the welfare of the homeowners."
Clearly, this tactic does not benefit home owners. It would be far better if property owners acquired help earlier in the process to make an objective evaluation of their situation. If they can pay for or almost afford the property, a work-out strategy (loan modification) with the loan provider really should be pursued. If they are not able to pay for the house nor have negative equity, then it is generally much better to keep what's left of their savings and credit score, and develop a strategy to get rid of the residence.
It is imperative that the home owners find somebody who can aid them throughout this procedure to guarantee the greatest achievable final result is identified and applied.
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Get Help from FTC Regarding California Mortgage Foreclosure Laws
By: Michael Hanks
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