Bank of America (NYSE:BAC)
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The Federal Trade Commission said Wednesday that it is mailing more than 450,000 refund checks to struggling homeowners who were allegedly cheated by Countrywide Home Loans as they fought to keep their homes.
The FTC reached an agreement last year with Countrywide, now a unit of Bank of America Corp. (BAC), in which the company agreed to pay $108 million to settle charges that it took advantage of homeowners in distress by inflating the cost of services relating to their defaults, such as property inspections and foreclosure services.
The agency also alleged that Countrywide overstated the amounts that borrowers owed when they entered bankruptcy, as well as surreptitiously adding fees and charges to homeowners' accounts.
FTC Chairman Jon Leibowitz said in a statement Wednesday that Countrywide's behavior was unconscionable. "It's astonishing that a single company could be responsible for overcharging more than 450,000 homeowners," he said.
The charges involved activity at Countrywide prior to its June 2008 acquisition by Bank of America.
Bank of America representatives could not immediately be reached for comment.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222; firstname.lastname@example.org