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January 18, 2008
Countrywide Draws Ire of Judges
With Bank of America Corp. preparing to buy Countrywide Financial Corp., more and more federal bankruptcy judges are questioning the business practices of the troubled mortgage behemoth. The latest controversy centers on Countrywide admitting to not properly crediting a borrower's payments made during bankruptcy and instead applying them to pre-bankruptcy debt, which is prohibited. If the planned acquisition is completed, Bank of America may inherit a list of other potential legal liabilities from Countrywide. These range from inquiries launched by the SEC and several state attorneys general to shareholder lawsuits tied to Countrywide's financial woes and other class-action and individual suits brought by borrowers for alleged abuses by the company.
Posted by S. Germain at January 18, 2008 07:56 AM