Arising from the grit and good luck of its white-collar and blue-collar founders (Angelo R. Mozilo and David Loeb), Countywide Financial Corporation quickly rose to the top of insurers in America in just a matter of decades. It amassed billions of dollars of assets and revenue, tens of thousands of employees, and hundreds of offices. Like many other financial companies at the beginning of the 2000s, it aggressively marketed and mortgaged homes for millions of Americans-many of them who should not have had homes in the first place.
Countrywide accounted for nearly one in five of all mortgaged homes in the United States, which was almost five percent (5%) of the nation’s GDP. Thus, because it was heavily reliant on home mortgages for its source of income, and because of the massive collapse and recession around 2007-2008, Countrywide very rapidly fell into financial distress. To save the day, and the borrowers who had borrowed through Countrywide, Bank of America purchased Countrywide for a little over four billion dollars in 2008, creating Bank of America Home Loans in the process.Products and Services Offered by Countrywide
- Operating at billions of dollars in revenue, BofA Home Loans offers a variety of products and services, but the following illustrates their main streams of income.
- Mortgage Banking: Through the acquisition of Countrywide Financial Corporation, Bank of America Home Loans was able to secure and maintain one of the largest mortgage businesses in the world. It continues to offer financing to individuals and families that want to buy a home without the proper means of doing so. In exchange, BofA Home Loans receives an interest in the home itself as the mortgagor, known as a mortgage interest. It offers this services at extraordinary scale, lending to millions of people.
- Insurance: BofA Home Loans also underwrites and insurers millions of policies for individuals, families, and companies. Its products in this realm range from casualty, life, and property insurance for individuals to reinsurance and other corporate programs for businesses.
- Financial Services: BofA Home Loans also provides a multitude of general financial services, including but not limited to loan production, loan servicing, and loan closings.
- What follows next is a summary of all litigation against Countrywide and its successpr, Bank of America Home Loans, since 2005..
Surveying the litigation against Bank of America Home Loans (the successor to Countrywide Financial), what is interesting, compared to other insurers, is the diversity in subject matter of all the cases as well as the relative small percentage of cases involving insurance matters. For instance, the largest block came from the corporate realm in matters involving things such as corporate lending, fraud, disclosure, and other transactional issues. These accounted for almost twenty-five percent (25%) of all cases). The next largest group related to real property and these often and expectedly involved homes, foreclosure and other mortgage issues. These were roughly sixteen percent (16%) of the litigation against Bank of America Home Loan. Insurance issues only arose in the caseload a little under ten percent (10%) of the time. Here are some representative cases:
Mike Hjalmarson v. Bank of America, N.A.: In this Texas case, the plaintiff brought action on behalf of his deceased sister. He claimed that, through her, he was entitled to collect on her life insurance policy. Bank of America responded that she had failed to pay on several premium payments and, thus, was unable to receive the benefit of the plan. The plaintiff responded by arguing that Bank of America waived this provision by failing to terminate the policy. The court found no such implied waiver and ruled in favor of Bank of America.
Lynda Sacks v. Countrywide Insurance: In this case from California, the plaintiff sought to collect on disability insurance because she developed a progressive disease that resulted in immobility and an inability to focus. Countrywide denied her coverage because it said that her primary occupation was not in jeopardy due to her permanent sedentary status. To this, the plaintiff claimed that Countrywide’s interpretation of boilerplate language in her plan violated Employee Retirement Income Security Act of 1974 (ERISA) and that she should be barred from benefits as a result. The court agreed and found that a plain reading of her plan should, combined with the nature of her injury, should allow her to collect under the policy.
Hagendorf v. Countrywide: In this case, the plaintiff tried to remove money out of escrow after starting the process of purchasing a home because he believed the amount of his taxes and home insurance premiums was higher than initially suggested. This was a fact-intensive matter involving a jury a analysis of representations made during negotiations. In the end, they found for Countrywide. It is telling to see that this came down to a matter of “he said, she said.” The weight of persuasion was titled against the plaintiff because Countrywide was in such a better position to call upon facts and circumstances.
All in all, plaintiffs feared terribly against Countrywide and its successor. More than half of all plaintiffs received nothing or something less than one hundred thousand dollars ($100,000.00). Approximately a quarter of all of them received a settlement or award between one hundred thousand dollars ($100,000.00) and one million dollars ($1,000,000.00). The remaining, about fifteen percent (15%), recovered more than one million dollars ($1,000,000.00).
Let Rosenfeld Injury Lawyers Assist You With a Claim Involving Countrywide Financial
These figures are not surprising. Insurance companies’ number one goal is to keep recoveries down because that keeps profits up. Further, most people do not have the time to master the intricacies of insurance law or their particular plans. Therefore, they often choose to accept amounts lower than what they deserve. However, with the team at Rosenfeld Injury Lawyers on your side, you can ensure that you receive the settlement or award that you should following an accident. We are experienced and qualified to handle your claims. Contact us today to hear about what we can do for you to guarantee you receive justice!