Countrywide Home Loans is one of the biggest (if not the biggest) lenders and mortgage loan servicers in the country. That is why I find it alarming when I see some of the ways they "service" their loans and borrowers.
For example, a few years ago, I had a late fee charged to my loan. The late fee was appropriate. However, when I sent in a full scheduled payment, countrywide first posted the late fee, and then held the remaining money in suspense, not applying it to my loan. When I called to ask why, I was told that Countrywide does not post partial payments. Since the remaining funds after they took the late fee off the top was not enough to satisfy a monthly installment, the funds would remain in suspense until I sent the rest.
I explained that in my experience (I worked in mortgage servicing for years), this is called "pyramiding" late fees.By taking the late fee off the top of a complete payment, they cause the next payment to also be late, and then apply another late fee. I said that they should apply the funds as per my direction, to the amortization of my loan, and that they ran no risk of not collecting the late fees-simply do not ever release the lien as long as late fees were owed.
However, a representative of Countrywide said they had checked with their lawyers, and they could use this practice in New Jersey. It may be true that it is not unlawful, I couldn't find specific statute that said otherwise, but it certainly is not totally ethical. There was a reason why the company I worked for would NEVER do this-because you knew it was simply wrong.
Countrywide also handles certain fees in a strange way.
I recently saw a $50 charge on my monthly HELOC statement online. It was under the category "Other Current Charges". When you moved the cursor over "Other Current Charges", a box popped up that explained this was due to "delinquency, termination charges, etc". I contacted Countrywide as these fees would not apply to my loan. The representative explained this was an annual fee on my HELOC-a valid fee. The issue was how it was represented on the website.
I looked further, and saw that the posting of the fee could not be found in the payment history Couintrywide provides. If the fee was part of a $450.00 payment, you would see the payment of $450.00, but the columns that show the spread of the funds would simply total to $400.00. Nowhere would the history show any fee was assessed, and except for you adding up the columns, nowhere does it show the fee was paid. Again, I don't know if there is anything illegal, but the accounting is very poor.
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