Another headache for Countrywide

It is hard to keep track of the various challenges facing Countrywide Financial at the moment, but this is a new one: "Countrywide Financial Corp. is the target of a multi-state federal investigation aimed at determining whether the Calabasas-based lender has been levying unjustified fees on consumers going through bankruptcy."

More, from this morning's Los Angeles Times: "The U.S. trustee's office, the agency charged with monitoring the bankruptcy courts, has filed subpoenas in at least a dozen cases in Florida, Pennsylvania and Texas asking Countrywide for information about questionable claims for fees."

Typically, when Fortune 500 companies face this kind of investigation they issue a boilerplate statement that reads something like this: "We are cooperating fully with this investigation and we look forward to a speedy resolution."

That's one of the things that makes this story different. Countrywide is objecting to the investigation: "Countrywide has objected to the subpoenas, saying in court filings that the sweeping nature of the requests is unprecedented and part of a 'series of attempts by the U.S. trustee to conduct a wholesale investigation into Countrywide's policies and procedures.' "

Ray of sunshine department: Countrywide shares gained 66 cents today, closing at $9.38.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Bloomberg

Comments

[sunsetbeachguy]

2 words

Death Spiral!

[Rob]

The fat cow is ready for harvest. The sooner they get it loaded up on the train the better. Consumer sentiment is paramount and constant borrage of stories like these are bad all around. It is true, doesnt matter....

[MyLessThanPrimeBeef]

Is euthanasia of a corporation legal? Don't take me to court. I am just asking in the name of intellectual curiosity, pursuit of knowledge, freedom of speech and all that...

[Inland Empire]

Dang! First the suntan, now he looks like he made from bondo.

[1]

Where's the orange?????

[Burma Shave]

Creepy suit.

Creepy tie.

Creepy tan.

What a guy.

[Martin]

It's really not funny if, in fact, the nation's largest mortgage lender conspired to charge excessive fees to people when they are at their most vulnerable: when they face losing their home. All of Countrywide's employees are also screwed by bad behavior among the higher-ups in the company. Before I would have argued that keeping Countrywide afloat will only be a good thing. Now I'm not so sure.

[toby]

Guilty people don't like to be investigated.

[Horizontal Translation]

Blog is on fire. Realtors and Countrywide stories get huge bang for the column space they occupy. Let's sex it up even more and get some behavioural economists in here to tell us what's really going to happen. I still say that if some major lenders are found guilty of malfeasance, they should be fined billions and the proceeds distributed among the employees.

On a positive note (I think??) House bill on mortgage reform was passed a little while ago. http://tinyurl.com/2h36cd

Anyone notice that the latimes today had two different links and headlines to the big mortgage story today, on the home page? The first, above the fold, reads:

"Mortgage mess -- or monster." Under the business section, further down, it's more tame: " Price tag in mortgage crisis is looking like real money "

[Steve]

Fine the God Father and his Mafia (CW) until they drop. There should be enough money to eliminate the current Federal deficit. No jail time just get the money to help all the victims.

[Michael Snyder]

I finally got the orange glow and it really didn’t come from a tanning booth! The “glow” is heat escaping from an internal melt-down!
Given the well documented “professional behaviors” exhibited by the top management at Countrywide, this “investigation” is just making time for the real power brokers behind Mozilo to cover their tracks. I’d be surprised to see any real punitive action directed towards Mozilo or his staff before the installation of the next Presidential administration.
In reality Angelo Mozilo did follow in his father’s footsteps. But instead of butchering cattle, he’ll go down as the man who butchered the housing market and triggered the first depression of the new millennia

[Maggie Knowles]

To Michael Snyder - Countrywide isn't the only one, check out this report by PBS NOW

http://www.pbs.org/now/shows/346/

"NOW connects the dots to see the extent to which recklessness, corruption and greed created this subprime mess that now threatens to undermine our entire economy. David Brancaccio talks to Rep. Keith Ellison, who grew up in North Minneapolis and who has pushed legislation to address the crisis. He also talks to Ameriquest whistleblower Mark Bomchill, who explains the competitive "boiler room" culture that encouraged brokers to aggressively push mortgage products they knew clients would be unable to repay."

In this report, see Roland Arnel, who led Ameriquest and their predatory lending practices. He was rewarded by Bush and is now US Ambassador to Holland.

[Maggie Knowles]

Here's more on Roland Arnall, owner of Ameriquest - (sorry, misspelled his name in previous comment)

"Arnall and his wife, Dawn, have been longtime, generous political
contributors, giving generously to both parties and favoring incumbents,
according to Federal Election Commission records.

Since 2002, Arnall has given campaign contributions of more than $7
million to California legislators, including $1.5 million to Arnold
Schwarzenegger.

In the 2003-2005 period, Arnall and his wife raised more than $12 million
for George W. Bush's political efforts, including $5 million for the Progress
for America Voter Fund, a self-proclaimed "conservative issue advocacy
organization dedicated to keeping the issue record straight."

Mrs. Arnall also served as a co-chair for the 2004 Republican Convention
and hosted a $1 million Bush-Cheney fund-raiser at the couple's 10-acre
home in Holmby Hills, California. After Bush was reelected, The Arnalls
contributed another $750,000 for inaugural balls in January 2005 and
effectively secured his place in line for a plum ambassadorship.

On August 1, 2005, Bush nominated Arnall to become the U.S.
ambassador to the Netherlands. The senate approved his nomination on
February 9, 2006.

Arnall was successfully installed as ambasssador to the Netherlands on
March 8, 2006 when the Dutch Queen Beatrix received Arnall's diplomatic
letters."

source: http://mortgagemisfit.com/arnallarticlewikipedia.html

[Michael Snyder]

Maggie,
I'm well aware of Countrywide's high profile position in this mess as opposed to WAMU Wells Fargo, B of A and all of the other greedy boneheads who couldn't see past their quarterly bonus. But Angelo makes such a good target and if there ever was a 'poster child" for the sub-prime melt down; he's it.

[Horizontal Translation]

I vote for Roland as the poster child. 1/4 Billion Dollar fine and off he goes. Holland... Hmm... maybe he's over there teaching ABN Amro a few tricks (they did a ton of business in the U.S.). This is interesting though. Last time I checked, Ameriquest had kept themselves open and had a delightful message about how they were very focused on responsible lending. Now if you check out their website, they ain't taking any more applications.

Anyone know if Citigroup completed the announced purchase of ABN Amro back at the beginning of the year? They make no mention of it on their website. Citigroup seems to be on the rise... getting their major cash infusion from Abu Dhabi ($7.5B). More foreign ownership of american assets. Fire sale is on.

[Brother Joe]

"Zero Down" mortgages were the stupidest idea that came out in the last 15 years...

Where was "Mr. Alan Greenspan"? Where was the "FDIC"?

Our Politicians have in their hands...

You are "Naive", defending Partisan Politics...

Both parties are sold-out to the rich...