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Countrywide fights federal abuse probe

Mar 14, 2008 Market Outlook

NEW YORK (MarketWatch) — Troubled mortgage lender Countrywide Financial Corp. is
attempting to block a federal inquiry into the way it treats bankrupt borrowers,
The Wall Street Journal reported Friday. The paper reported that the Justice
Department is currently leading the probe, which alleges Countrywide used abusive
behavior to penalize homeowners who defaulted on their loans. Countrywide is now
actively fighting that assertion in court. “The ramification of the U.S.
Trustee’s interpretation of its power is really staggering, and it doesn’t relate
simply to Countrywide,” said the lender’s lawyer Richard Connop in U.S.
Bankruptcy Court in Pittsburgh. The Office of the U.S. Trustee, the unit of the
Justice Department that is handling the inquiry, is also suing the lender on
similar charges in Florida, Georgia and Ohio.

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