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Countrywide Faces Setback

A federal judge here has ruled that a bankruptcy trustee can subpoena loan documents from Countrywide Financial Corp. and interview company executives under oath as part of a widening civil case involving the lender/servicer.

Judge Thomas Agresti is overseeing a months-old case where 293 Pennsylvania homeowners sued Calabasas, Calif.-based CFC, charging that the servicer sought improper fees and payments from distressed borrowers that violated bankruptcy regulations.

In a ruling last month, the judge said it has not been proven that CFC did anything wrong but a bankruptcy trustee involved in the case "has made a showing of a common thread of potential wrongdoing" in several instances where it moved to foreclosure on bankrupt homeowners.

At press time, a CFC spokesman had not returned a telephone call about the matter. CFC's foreclosure practices are under investigation in Florida, Georgia and Ohio. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/

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