Settlement Proposed in Countrywide Suit

By:: Kirk Haverkamp - MortgageLoan.com

Customers of the former Countrywide financial services and mortgage corporation will begin receiving letters today informing them of a proposed settlement regarding an alleged theft of personal and financial information.

The class-action lawsuit alleges that a senior financial advisor employed by Countrywide sold confidential information from millions of customer records to third parties. The company is charged with failing to adequately protect consumer information; Countrywide has denied any wrongdoing.

Those eligible for the proposed settlement include anyone who received a letter from Countrywide from Aug. 2 – Nov. 2, 2008, informing them that their information may have been compromised, and anyone who obtained a mortgage from Countrywide or had their mortgage serviced by Countrywide prior to July 1, 2008.

Under the proposed settlement, consumers would be eligible to be reimbursed for out-of-pocket expenses related to their information being compromised, including costs for credit monitoring and identity theft insurance, ordering new checks, replacing a driver’s license, changing a phone number, postage, telephone calls and lost time at a rate of up to $10 an hour.

Those who received the letter between Aug. 2 and Nov. 2, 2008, will also be eligible to up to two years’ free credit monitoring services through the TripleAdvantage Premium credit monitoring service provided by Experian.

The court has yet to approve the proposed settlement. The earliest date consumers will be able to file a claim under the proposed settlement will be Oct. 18, 2010.

Countrywide was acquired by Bank of America in 2008 after suffering heavy losses in the collapse of the subprime mortgage market. It presently operates as an entity primarily to resolve claims remaining against it; mortgages held or serviced by the company are presently managed under the Bank of America Home Loans division.

Countrywide previously reached a separate settlement with multiple state attorneys general over alleged unfair lending practices. Consumers who had taken mortgages with Countrywide and subsequently lost their homes to foreclosure or were in danger of doing so were provided cash payments or were granted loan modifications.

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