Appeal of Countrywide Home Loans, Inc.

Petitioner Countrywide Home Loans, Inc. appealed an award by the Commissioner of the State Banking Department in favor of Respondent Rachel Nicholson based on claims under the Consumer Protection Act. The issue stemmed from Respondent contacting Countrywide in 2005 in order to purchase a house. She spoke with two Countrywide agents who promised that they would "investigate and present her with the best [financing] program." At the hearing before the Commissioner, Respondent testified the agents orally approved her for a 30-year fixed rate mortgage loan at 6% interest. Thereafter, Respondent spoke with agents on a weekly basis regarding the property purchase and loan. The agents did not raise any problems with the loan application until two days before the scheduled closing date. On that day, despite the fact that there were no changes in Respondent's employment status or credit since the application had been filed, the agents informed her that Countrywide would not be able to grant a fixed interest loan for the amount she needed. They informed her that to purchase the home, she would need to apply for two different loans. On the scheduled closing date, as instructed by the agents, Respondent applied for two new loans at higher rates of interest but for shorter durations. After multiple hearings, the Commissioner ultimately entered an order ruling that Countrywide had committed "an unfair or deceptive practice" under state law, and ordered that Countrywide reimburse Respondent for all monies paid prior to, at and after closing, as well as discharge the first mortgage and void the second. Furthermore, Countrywide was ordered to quitclaim the property to Respondent. Finding that the Commissioner should not have granted a hearing on the merits of Respondent's claims, the Supreme Court vacated the award entered in her favor. View "Appeal of Countrywide Home Loans, Inc. " on Justia Law