Report says bankruptcy court regulator looking into whether mortgage lender is tacking on improper fees and charges to loans in foreclosure.
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NEW YORK (CNNMoney.com) -- Countrywide Financial, the nation's leading mortgage lender, is facing a federal probe into its foreclosure practices, according to a published report.
The New York Times reported Wednesday that the U.S. Trustee, the federal agency monitoring the bankruptcy courts, subpoenaed its records to determine if two foreclosures in southern Florida represented abuses of the bankruptcy system by the lender.
The agency, a part of the Justice Department, announced an effort to move against mortgage servicing companies that file false and inaccurate claims in foreclosure cases.
The paper says that in the two cases being examined borrowers who had filed for bankruptcy court protections objected to Countrywide's claims of what was owed on their home loans. One couple contended that their mortgage payments were current, while Countrywide (Charts, Fortune 500) claimed $2,400 in overdue mortgage payments in that case.
The paper reports that the U.S. Trustee took an interest in both matters after Countrywide did not respond to the borrowers' objections and judges in the cases ordered the lenders' claims for various fees stricken from the claims.
A Countrywide spokesman told the paper it does not comment on pending litigation, but added that it had intended to appear at the hearings and was investigating why its outside counsel did not do so.
Countrywide has filed objections to the U.S. Trustee's probe and subpoenas in both cases, the paper reported, saying that they were overly broad and exceeded the office's powers. But the bankruptcy judge hearing one of the cases has allowed the regulator's investigation to go forward.
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