not on the Waxman inquiry, but related..............(comments also interesting, at the bottom of the link)
January 14, 2008, 9:17 am
Judges Raising Eyebrows Over Countrywide
Posted by Peter Lattman
The last time we told you about the U.S. Trustee Program, that DOJ division that oversees the bankruptcy system, we highlighted its investigation into frequent alleged misrepresentations that mortgage companies such as Countrywide had made in bankruptcy cases.
Today Law Blog colleague Amir Efrati reports that more judges overseeing those cases are raising concerns about the big mortgage lender ahead of its planned acquisition by Bank of America. (Click here for a WSJ story on B of A’s possible legal liabilities in acquiring Countrywide, including an investigation by the SEC.)
Countrywide’s errors include charging the borrowers improper and unsubstantiated fees; inflating what borrowers owe in filings with the court; and applying payments borrowers made after filing for bankruptcy toward pre-bankruptcy debt—a big no-no.
Countrywide told the WSJ that “we believe we have fully complied with all rules and regulations.”
During a hearing last month, U.S. Bankruptcy Judge Jeff Bohm chastised Countrywide and its lawyers after the company admitted making numerous errors in a case. “How many times do I have to listen to that before I conclude, ‘You know, there’s got to be some kind of reckoning’ when I keep hearing time after time, ‘we made a mistake, we made a mistake, we made a mistake, we made a mistake?’” Judge Bohm said. He is considering sanctions against the company, which has already spent $400,000 in costs associated with the case after having its employees deposed by a U.S. Trustee.
In Miami, Bankruptcy Judge A. Jay Cristol last month said the company had been found “with its hand in the cookie jar” after it said it overstated how much a borrower owed. Last week the New York Times reported that in Pittsburgh, Bankruptcy Judge Thomas Agresti criticized Countrywide for fabricating documents after the company began foreclosure proceedings against a borrower. The documents purported to show that the borrower owed nearly $5,000.
Said Judge Agresti in a hearing last month, channelling Billy Shakes: “These letters are a smoking gun that something is not right in Denmark.”
blogs.wsj.com |
