Bank of America/CountryWide Claims Its Ads Were Mostly Lies
CountryWide, the subprime mortgage lender acquired by Bank of America, has repeatedly said in ads and in Congressional testimony that it wanted to work with homeowners whose payments had gotten beyond them. But a lawsuit in New Hampshire claims those promises are false and that anyone trying to reorganize payments on a CW loan only gets the runaround. In response, CW lawyers have argued that their own ads are mostly lies -- "mere commercial puffery ... only Countrywide's vague advertisements," according to MSNBC.
CountryWide's web site currently offers six ways in which the company promises to help troubled lenders whose homes are threatened with foreclosure:
- Refinancing
- Extending the term of the loan
- Interest rate reductions
- Temporarily freezing monthly mortgage payments
- Extended repayment schedules
- Decreasing the principal balance of the loan
The Raymonds spent eight months trying to get their mortgage modified, per CW's ads. They didn't want the face value of the loan reduced, just the interest rate. MSNBC reports:
They allege that Countrywide employees told different stories about whether they could get their loans modified and what they needed to do. They were asked to send the same documents over and over, they say, by a constantly shifting set of Countrywide employees who rarely returned their phone calls.The Raymonds ended up paying $3000 a month on a house that should have been $1400, and they declared bankruptcy. The house was foreclosed on and CW now owns an empty building worth less than its last sale price.
So who at CW was responsible for this advertising? One of them was Adam Michaelson, a mid-level marketing executive at CW from 2003 to 2006, who wrote a book about his experiences at the dubious subprime lender. The WSJ said this about his book, The Foreclosure of America:
we learn why he studied advertising at Boston University: "Many cute girls went into advertising; and, most importantly, the concept of controlling the behavior of millions of people, however subtly, was an aphrodisiac."The Raymonds are not the only ones questioning CW's advertising practices. Who knew the company was buttering up black church leaders for subprime endorsements? This was in Black Voice News:
It amazes me that no one discusses the churches role in setting many of these firsttime homebuyers up with real estate utopia only to experience a crash landing. Early in 2002, Countrywide Home Loans were beginning to sweep the nation with their sub-prime rate offers. I recall seeing brochures at my church advertising Countrywide Home Loans with a picture of Bishop John R. Bryant on the cover shaking hands with one of the White executives of Countrywide. In the brochure, Bryant made the following statement: "With a well-established membership of nearly 500,000 families throughout the western U.S., the 5th District AME Church is committed to helping our members better their lives in a variety of ways," said Bishop John R. Bryant, presiding prelate of the 5th District. "In Countrywide, we have found a partner equally committed to educating our membership on the possibilities homeownership brings to them."The article suggests that black churches should investigate more thoroughly who they get into bed with.