Countrywide Enters State Settlement Pact

Countrywide Home Loans Inc., Calabasas, Calif., has entered into a $500,000 settlement with a Connecticut regulator for charging excessive financing fees on 473 borrowers and for failing to register 147 originators with the state banking department.Countrywide paid a $401,750 civil money penalty for the violations and contributed $100,000 to NeighborWorks to provide homeownership assistance for state residents. State examiners found that Countrywide imposed prepaid finance charges that exceeded (in the aggregate) the legal limit, which is 5% of the loan amount or $2,000, whichever is greater. The limit on prepaid finance charges, which includes points and application and administrative costs, was enacted four years ago as part of the state's anti-predatory-lending law. Countrywide has refunded all the 473 overcharged borrowers and has agreed to take corrective actions with respect to prepaid finance charges and registering originators that work directly for the company. Countrywide said the settlement arose from a "misinterpretation and misapplication" of certain Connecticut requirements and that the company undertakes extensive efforts to comply with national and state laws governing its lending operations. The company can be found online at http://www.countrywide.com.