Here is something you don't hear every day: your lender was accused of lying and is now required to give you some money to make up for it.
The Federal Trade Commission today started mailing out a total of $108 million in refund checks to 450,177 homeowners who were allegedly overcharged by Countrywide Home Loans, which is now owned by Bank of America.
"Checks are being mailed today, so people should expect to receive them within a few days," says Frank Dorman, an FTC spokesman.
The refunds vary from a few to several thousand dollars and resulted from a settlement reached last year over allegations that Countrywide collected excessive fees from borrowers who were in default. The fees included charges for property inspections, lawn mowing and other services intended to protect the lender's interest in the homes.
"Consumers whose loans were serviced by Countrywide between January 1, 2005, and July 1, 2008, and who were subject to the company’s allegedly unlawful practices" are eligible for refunds, according to the FTC.
Borrowers who were in Chapter 13 bankruptcy and had fees or escrow charges added to their mortgage accounts without notice also will receive a check if they paid those fees to Countrywide after their bankruptcy case closed.
If you have already lost your home to foreclosure you remain eligible to receive the refund if you meet the other requirements.
"It does not matter whether the consumer still owns the home or whether they have paid off the loan Countrywide was servicing," Dorman says.
If you are one of the borrowers eligible for a refund you've probably been informed by now. But if you think you are eligible and don't receive a check within the next few days you may call (888) 230-3196 to inquire.
Wells Fargo borrowers
Also this week, the Federal Reserve Board issued a consent cease-and-desist order and assessed an $85 million civil money penalty against Wells Fargo. The order addresses allegations that Wells Fargo employees "steered potential prime borrowers into more costly subprime loans and separately falsified income information in mortgage applications."
Wells Fargo is required to notify "all borrowers who obtained cash-out refinancing loans between January 2004 and June 2008 at a Wells Fargo Financial office where there is evidence that sales personnel at that office altered or falsified borrowers' income information."
The lender has 90 days to submit a plan detailing the process to comply with the order.
About 3,700 and possibly more than 10,000 borrowers may be eligible for compensation, according to the FRB. Compensation amounts will vary but will likely range from $1,000 to $20,000.
Wells said in a statement: "there is no customer-specific information that Wells Fargo can provide at this time," but "Wells Fargo Financial customers who would like to discuss this general issue further can call (877) 546-0090."