Countrywide wins one

Sort of. A U.S. Bankruptcy Court judge in Houston faulted the Calabasas-based company for its handling of the mortgage of Texas homeowner William Parsley, who had filed for Chapter 13 protection. Countrywide and its lawyers showed "a disregard for the professional and ethical obligations of the legal profession and judicial system," wrote Judge Jeff Bohm. But he stopped short of fining Countrywide, saying he was "unable to say their conduct transcended from merely negligent bungling to full-blown bad faith." From the WSJ:

Judge Bohm twice ordered Countrywide and its lawyers to justify their actions, saying he was considering fines or other punishment. He tracked the problem in Mr. Parsley's case to Countrywide's failure to communicate with outside lawyers and criticized the mortgage company's "corporate culture" of producing flawed, incomprehensible accounts of how it handled payments on home loans. "What kind of culture promotes payment histories that are so confusing to the vast majority of persons, including attorneys and judges -- not to mention borrowers -- that it becomes necessary for legal assistants to 'simplify' them -- leading to more errors and confusion?" Judge Bohm wrote, echoing criticism of Countrywide from other judges and consumer bankruptcy attorneys.