fines

Another Major Ripoff, Another Slap on the Wrist Fine - Countrywide Settles for $108 million

Submitted by on

It's no wonder we get fraud, abuse of customers, ripoffs as standard fare by corporations.

Countrywide agrees to pay a $108 million fine for excessive fees on home loans, one of the biggest fines by the FTC.

When homeowners fell behind on their payments and were in default on their loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property, according to the FTC complaint. But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. The subsidiaries marked up the price of the services charged by the vendors – often by 100% or more – and Countrywide then charged the homeowners the marked-up fees. The complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times. As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue.

Countrywide is now owned by Bank of America. In 2008, Countrywide held a mortgage portfolio valued at $1.4 trillion.

Countrywide even tried to skirt bankruptcy law and make broke homeowners, now out of a house, pay even more fees after the fact.

Fines, Slaps on the Wrist & Business as Usual

Submitted by on

Anyone else notice G.E. was fined $50 million? That's chump change for G.E. They spent $200 Million in legal fees trying to fight it.

We had BoA fined $33 million for Merrill Lynch bonuses. How big were those bonuses? $5.8 billion.

Earlier the SEC fined Stanford group, didn't deter much of anything as noted by the final arrests and $8 billion in fraud.

This problem goes way past Wall Street. Most fines and violations are more like a speed bump slow down as corporations throw change at the toll booth.