- Describes Initiatives to Help Troubled Borrowers Keep Their Homes -
WASHINGTON, May 6 /PRNewswire-FirstCall/ -- Steve Bailey, Senior ManagingDirector of Loan Administration for Countrywide Financial Corporation(NYSE: CFC), today testified before the Senate Judiciary Subcommittee onAdministrative Oversight and the Courts. Highlights of his written testimonyare included below:
-- There have been a number of allegations made in the media recently relating systemic errors in bankruptcy servicing practices. Relative to Countrywide, these reports are unfounded. Bankruptcy servicing is a complex process involving legal proceedings and rules that can vary significantly across bankruptcy jurisdictions, and each borrower's circumstances are unique. While mistakes may sometimes occur, Countrywide believes its bankruptcy servicing processes are best in class and result in minimal instances of error. This view is supported by a number of internal reviews conducted by Countrywide that indicate an error rate of less than one percent for mistakes that adversely impact a borrower.
-- Countrywide is committed to helping its borrowers avoid foreclosure wherever they have a reasonable source of income and a desire to remain in the property. Countrywide is also committed to being supportive of the bankruptcy process when used by borrowers who are experiencing significant financial hardship to help them sustain homeownership. Accordingly, Countrywide has always strived to accurately report and reflect the amounts due from borrowers so they can complete their court-approved bankruptcy plans.
-- Countrywide's policies and practices are designed to avoid incurring unnecessary fees on accounts, particularly those in bankruptcy. For example: - Countrywide does not charge late fees on post-petition delinquencies. Countrywide foregoes these fees though we are contractually allowed to collect them. - Countrywide does not collect prepayment penalties on payoffs for loans in bankruptcy, even though it is contractually allowed to do so. - Countrywide generally waits 45 to 60 days into a post-petition delinquency, depending on the requirements of the investor, before referring post-petition delinquent accounts to attorneys to file motions for relief from the bankruptcy stay.
-- Countrywide has implemented or is in the process of implementing steps to further enhance the transparency, accuracy and integrity of this process. These changes are designed to improve the disclosure of fees, ensure the accuracy of all amounts charged and ensure the integrity of the entire process. These steps include: - An independent review by a qualified outside auditor on a random sample of loans in bankruptcy focusing on the accuracy of pre- and post-petition filings and the accounting for payment plans. - Establishment of the Bankruptcy Ombudsman's Office to ensure that borrowers and their counsel can have the means to seek a high level review of any perceived discrepancies on accounts in bankruptcy. - Adoption of certain best practices which the National Association of Chapter 13 Trustees is expected to recommend in the near future.
'A successful Chapter 13 plan is in the interest of the borrower, theinvestor and the mortgage servicer,' said Bailey. 'Countrywide recognizes andappreciates the goal of a Chapter 13 bankruptcy to provide borrowers with afresh start and the opportunity to retain their most valued asset, theirhome.'
About Countrywide
Founded in 1969, Countrywide Financial Corporation is a diversifiedfinancial services provider. Through its family of companies, Countrywideoriginates, purchases, securitizes, sells, and services residential andcommercial loans; provides loan closing services such as credit reports,appraisals and flood determinations; offers banking services which includedepository and home loan products; conducts fixed income securitiesunderwriting and trading activities; provides property, life and casualtyinsurance; and manages a captive mortgage reinsurance company.
SOURCE Countrywide Financial Corporation
