BofA deals on Countrywide case

The banking company will pay $108 million to settle government charges that the loan servicing business of Countrywide, which Bank of America now owns, collected excessive fees from homeowners. The money will be used to reimburse 200,000 homeowners who were allegedly overcharged. "Follow the law, or face the consequences," FTC Chairman Jon Leibowitz said at a press conference. From the LAT:

Mortgage servicers, who collect monthly payments on loans, are allowed to charge homeowners for items such as property inspections, lawn mowing and other services designed to protect the lender's financial interest in the property, the FTC said. But as the housing market collapsed, Countrywide created subsidiaries to do the work, then marked up the price of those services by 100% or more, charging homeowners the fees to increase profits from default-related services in bad economic times, the FTC said.

B of A said it agreed to settle "to avoid the expense and distraction associated with litigating the case."