In the New York Times, Gretchen Morgenson reports on Countrywide's latest scam: fabricating three documents to a homeowner about a mortgage. "These letters are a smoking gun" said the bankruptcy judge in Pittsburgh.

Countrywide was busted by the homeowner's attorney, who noticed that letters purporting to be from 2003 contained the current address of the attorney's law firm, not the address of the firm at the purported date of the letter. Countrywide terms these "recreation letters," and claims that their purpose is to illustrate to the debtor the history of the case, as a memorandum would. The letters contain no disclaimer explaining that they are not actual records. The letters are important because they would support Countrywide's claim that the homeowner is behind on payments. However, the homeowner had just completed a Chapter 13 bankruptcy, in which Countrywide agreed that she was no longer in default and that future payments would be made through the bankruptcy court, which court records show occurred.

The judge was not pleased to hear about the letters. "[T]he Court's concerned about this. The Court's very concerned. Again, I'm totally surprised at what I'm hearing. I didn't anticipate this at all today, but it's definitely a matter that needs to be vetted further through discovery . . . ."

In addition to the judge's displeasure, the Trustee's staff attorneys attended the hearing. One stated that "the issues that were told to the Court today are of grave concern to the United States Trustee."

"Recreation letters" are only the latest in Countrywide's habit of questionable behavior. As Morgenson explains, 300 bankruptcy cases have come to the bankruptcy court in Pittsburgh's attention, identified by Ms. Winnecour, the Chapter 13 trustee for the area. Already, she has asked the court to sanction Countrywide for losing or destroying homeowners' checks totaling $500,000 over two years.