A recent news piece from CNN reports that the home loan giant has come under the radar for suspicion of wrong doings, which have warranted an order of subpoena by a federal judge in Pittsburgh, Pennsylvania.

It is suspected that Countrywide, among other lenders, had attempted to modify loan agreements it originally made with borrowers with questionable credit. The company is also under allegations of harassing borrowers who were under bankruptcy protection, threatening to foreclose even after court proceedings had legally arranged a repayment plan.

Violating the automatic stay is a serious liability, I have pointed out in several posts and in the chapter 7 page how the automatic stay becomes your shield when you’re under going bankruptcy proceedings. Lenders will take chances and sometimes, as it is actually the case with many, their automated computer systems take over when payments are not received. However when representatives of the company begin to call you in person, this is no longer considered an automated response by their system. All “humans” within that company should be aware that you’re account is on hold because of your bankruptcy petition.

If this should happen to you, you need to take action by reporting the event to your attorney at once. This is why it is important to have representation. Your attorney would know exactly what to do, should you become a target of collection during your proceedings. Lawsuits for punitive damages are not uncommon and though most lenders won’t take the risk, for some reason others do, and it not only complicates your process but it can add legal costs.

Countrywide admits to having handled some debts erroneously but denies harassing bankruptcy protected borrowers to collect money.

Foreclosures for the lender have risen dramatically causing share values to slide significantly, however I think the biggest burden the company faces at this point is the surplus of homes in the tens of thousands it now owns across the country that it must now unload at severe discounts.

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