Bankruptcy Law
Countrywide Requires Trustee to Keep Quiet, Prompting DOJ Objection
Posted Aug 11, 2008, 07:00 am CST
By Debra Cassens Weiss
A settlement requiring a bankruptcy trustee in Pittsburgh to refrain from criticizing Countrywide Financial Corp. is being criticized by the U.S. Justice Department.
A court filing by DOJ lawyers claims the deal may impede witness testimony in the U.S. Trustee’s investigation of Countrywide, the Wall Street Journal reports (sub. req.). The U.S. Trustee is probing mortgage processing problems by the lender in Pittsburgh, Atlanta, Ohio and Florida.
The nondisparagement clause was part of a $325,000 settlement between the lender and Pittsburgh Chapter 13 trustee Ronda Winnecour. It requires Winnecour and her employees to refrain from disparaging the company, either directly or indirectly.
Winnecour had asserted that Countrywide lost more than $500,000 in checks her office forwarded for homeowners’ mortgage debt and may have charged improper late fees for its own mismanagement.
Countrywide also agreed to investigate its payment records as part of the deal.