Mortgage Company Accused of Defrauding Katrina Victims

Angry homeowners hit hard by Hurricane Katrina are accusing Countrywide Home Loans of reneging on a promise to help them by temporarily suspending their mortgage payments. 

According to a class-action lawsuit filed in Louisiana today, homeowners say the mortgage giant is now demanding any deferred payments be paid up immediately, often with interest and penalties attached. Plaintiffs' attorneys say that as a result, many struggling homeowners have been sent into foreclosure.

In a goodwill gesture after Katrina hit two years ago, Countrywide announced it would suspend mortgage payments for hurricane victims for up to 90 days. Homeowners say they were told by Countrywide agents that any deferred payments would be added to the back end of the loan term, and that no lump sum, interest or penalties would be imposed.

According to the lawsuit, however, homeowners have been notified by Countrywide that they have to either pay the entire deferred amount immediately or restructure their loan in a way that would cost them thousands of additional dollars. 

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Plaintiff Donna Hellmers of Hammond, La., told the Blotter on that she was "dumbfounded" by the change in policy, and when she demanded an explanation from a Countrywide agent, she was told "the lender has changed their mind." Hellmers, who said her family faced severe financial hardship after Katrina, accused Countrywide of "taking advantage of people when they're down."

A similar class-action lawsuit was filed against Countrywide earlier this year by Texas homeowners affected by Hurricanes Katrina and Rita. A homeowner in that case reportedly recorded a telephone call with a Countrywide agent who explained the company's apparent change of heart.  According to the agent, "Unfortunately, we were telling people things that we should not have been telling people."

Countrywide Home Loans had no immediate comment on today's lawsuit.

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