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Louisiana Attorney General Opens Investigation into Mortgage Company Practices
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Louisiana Attorney General Opens Investigation into Mortgage Company Practices

as posted at www.ag.state.la.us

AG’s Office Receiving Complaints about Countrywide Mortgage Company

(Baton Rouge, LA) Consumers are flooding the Attorney General’s Consumer Protection division with numerous complaints about the way they are being treated by some home mortgage companies. In response to those complaints, Attorney General Charles C. Foti, Jr. is launching an investigation into at least one company, Countrywide Mortgage, and others may follow.

Consumers have complained that Countrywide is withholding or is slow in forwarding the proceeds of insurance checks intended for home repairs. In some cases, homeowners are being forced to pay for costly repairs from their own pockets in order to get the work done in a timely manner. In one case, a consumer’s check for more than one hundred thousand dollars was held by Countrywide for more than a month forcing him to come up with fifty thousand dollars of his own money to pay for repair work.

“Typically, a homeowner will receive a check from an insurance claim and that will be made out to both the homeowner and the mortgage company. The check requires signatures from both parties before the funds can be made available. If the mortgage company refuses to release the funds or refuses to release funds in excess of the mortgage amount, this is not business as usual,” explained Attorney General Foti. “I intend to investigate all of these allegations and see what I can do to help our citizens get fair treatment as they try to rebuild,” General Foti added.

Another complaint being investigated by the Attorney General’s Consumer Protection division involves mortgage lenders charging excessive prepayment penalties when homes are destroyed and the mortgage is paid off by the insurance company. Consumers allege that some companies are charging exorbitant fees for paying off home mortgage loans early.

“I believe in these trying times companies should be trying to work with our citizens who have lost everything and should above all be fair,” stated General Foti. “This type of action, if indeed it is occurring, hardly seems fair.”

Attorney General Foti is also encouraging all citizens who have had similar problems and wish to file a complaint to call the AG’s Consumer Protection hotline at 800-351-4889.

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