Countrywide Executive Addresses Senate Subcommittee
May 06 2008 - 1:04PM
PR Newswire (US)
- Describes Initiatives to Help Troubled Borrowers Keep Their Homes
- WASHINGTON, May 6 /PRNewswire-FirstCall/ -- Steve Bailey, Senior
Managing Director of Loan Administration for Countrywide Financial
Corporation (NYSE:CFC), today testified before the Senate Judiciary
Subcommittee on Administrative Oversight and the Courts. Highlights
of his written testimony are 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, the investor and the
mortgage servicer," said Bailey. "Countrywide recognizes and
appreciates the goal of a Chapter 13 bankruptcy to provide
borrowers with a fresh start and the opportunity to retain their
most valued asset, their home." About Countrywide Founded in 1969,
Countrywide Financial Corporation is a diversified financial
services provider. Through its family of companies, Countrywide
originates, purchases, securitizes, sells, and services residential
and commercial loans; provides loan closing services such as credit
reports, appraisals and flood determinations; offers banking
services which include depository and home loan products; conducts
fixed income securities underwriting and trading activities;
provides property, life and casualty insurance; and manages a
captive mortgage reinsurance company. DATASOURCE: Countrywide
Financial Corporation CONTACT: Media, 1-800-796-8448, , or Investor
Relations, +1-818-225-3550, both of Countrywide Financial
Corporation Web site: http://www.countrywide.com/
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