The federal agency monitoring the bankruptcy courts has subpoenaed Countrywide Financial, the nation's largest mortgage lender and loan servicer, to determine whether the company's conduct in two foreclosures in southern Florida represented abuses of the bankruptcy system, the New York Times reports.
The subpoenas for Countrywide documents were issued in late October by the United States Trustee after the agency announced an effort to move against mortgage servicing companies that file false and inaccurate claims in foreclosure cases. The inquiries into Countrywide by the trustee's office, a division of the Justice Department, come as foreclosures are increasing across the country.
The ways that lenders and loan servicers deal with troubled borrowers are also coming under increased scrutiny by judges. In recent weeks, three federal judges in Ohio have dismissed 73 foreclosure cases brought by lenders and loan servicers against borrowers because the companies failed to show proof that they owned the notes underlying the properties they were trying to seize.
In Florida, one of the trustee's inquiries involves Manuel Del Castillo and Maria E. Pena, Miami borrowers who filed for protection last May under Chapter 13 of the bankruptcy code. In July, Countrywide Home Loans filed a claim, saying that the borrowers owed almost $279,000 on their loan.
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