Thursday, March 06, 2008

Countrywide: Incompetent, Not Malicious

by Tanta on 3/06/2008 02:55:00 PM

I feel a little vindicated by this, as I have been arguing something similar for months now. From the LAT:

A judge declined to sanction Countrywide Financial Corp. on Wednesday for its handling of a borrower's bankruptcy case, saying errors by the lender, including allegedly improper or unexplained fees, didn't reflect bad faith.

But Judge Jeff Bohm of U.S. Bankruptcy Court in Houston said he was disheartened that Countrywide and its lawyers showed "a disregard for the professional and ethical obligations of the legal profession and judicial system."

In a 72-page opinion, the judge said he did not find "clear and convincing" evidence that Countrywide's conduct "transcended from merely negligent bungling to full-blown bad faith." He urged the Calabasas-based company, however, to "reevaluate its policies and procedures" so that its actions wouldn't "undermine the integrity of the bankruptcy system."

Countrywide faces increasing pressure to clean up alleged excesses in servicing home loans, including those of borrowers in bankruptcy.

In the last week, a part of the Justice Department that oversees bankruptcy proceedings has sued Countrywide at least twice, seeking sanctions for alleged abuses.

Countrywide representatives couldn't be reached for comment, nor could a lawyer for the borrower, William Parsley, a resident of Willis,Texas.
Maybe now we can begin to take seriously the structural issues within the mortgage servicing industry that lead to this kind of negligent bungling? A girl can dream . . .