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Countrywide to Refund $108 Million to Homeowners

Countrywide, the large mortgage lender purchased by Bank of America in 2008, has agreed to pay $108 million to homeowners for overcharging them in certain foreclosure and bankruptcy situations.

The settlement with the Federal Trade Commission rights a number of wrongs, including charging high markups for services related to foreclosure like property inspections. (Which is really kicking a homeowner when he's down: Imagine that you owned a home, Countrywide was holding your mortgage, and due to an unfortunate circumstance like unemployment or a medical crisis you stopped paying your mortgage, and then you had to pay w-a-a-a-y above prevailing rates for an inspection to help them foreclose!)

Before the acquisition, Countrywide was the largest mortgage servicer of loans in the U.S., servicing more than $1.4 trillion of them. (A little glossary: A servicer is a company that collects mortgage payments and applies them to loans, as opposed to an originator, which is the bank that lent you the money; sometimes the same company will both originate and service your mortgage.) As it stands, some 200,000 homeowners could be eligible for refunds, according to an article by Dina ElBoghdady in today's Washington Post.
The refunds will go to consumers who were overcharged by Countrywide before June 2008, according to the FTC. Even if you think you're one of them, you should continue to make your mortgage payments. Meanwhile, if you are eligible, you'll receive a letter, according to the FTC.

Since I'm not sure they've thought of the monumental problem of tracking down all the homeowners who have already been foreclosed upon and had to move, if you think you are eligible, and you moved in the past two years, make sure the Post Office has your current address.

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