Countrywide defends process for bankrupt borrowers
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, Countrywide, mortgages May 6th, 2008Mortgage lender Countrywide Financial Corp (CFC.N: Quote, Profile, Research) on Tuesday defended its treatment of borrowers who have filed for bankruptcy and pledged to hire an independent auditor to review the company’s practices.
“This type of processing can result in some mistakes from time to time,” Steve Bailey, Countrywide’s chief executive for loan administration, said in prepared testimony to a Senate Judiciary subcommittee hearing. Bailey pledged that Countrywide will take necessary steps to reduce “avoidable errors,” and appoint a bankruptcy ombudsman.
Countrywide faces a slew of lawsuits accusing the nation’s largest mortgage lender of abusing the bankruptcy and foreclosure processes and of sloppy record-keeping. Last month, a federal bankruptcy judge said the U.S. Trustee, an arm of the Justice Department that oversees bankruptcy cases, had the authority to investigate alleged misconduct by Countrywide.
Countrywide agreed in January to be acquired by Bank of America Corp (BAC.N: Quote, Profile, Research) for $4 billion.
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