WASHINGTON – Bank of America will pay $108 million to settle federal charges that Countrywide Financial Corp., which it acquired nearly two years ago, collected outsized fees from borrowers facing foreclosure.

It’s the latest evidence of misconduct at Countrywide, once an industry giant that has since fallen. Last year, three top executives, including former CEO Angelo Mozilo, were charged with civil fraud and insider trading by the Securities and Exchange Commission.

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Bank of America is to refund $108 million to about 200,000 borrowers with Countrywide Financial who, federal officials say, paid inflated fees when they were facing foreclosure. 2009 Associated Press file

The settlement, which seeks to refund money to about 200,000 borrowers, was announced Monday by the Federal Trade Commission. It is the largest mortgage industry settlement for the agency, which oversees non-banking functions such as debt collection.

The FTC’s chairman, Jon Leibowitz, accused Countrywide of “callous conduct, which took advantage of consumers already at the end of their financial rope.”

Bank of America purchased Countrywide in July 2008. The actions in the case took place before the acquisition.

The Charlotte, N.C.-based bank, which neither admitted nor denied the charges, said it agreed to the settlement “to avoid the expense and distraction associated with litigating the case.”

Countrywide hit borrowers who were behind on their mortgages with fees of several thousand dollars at times, the FTC said. The fees were for such services as property inspections and landscaping that far exceeded market rates. Countrywide created subsidiaries to hire vendors, which marked up the price for such services, the agency said.

“Countrywide profited from making risky loans to homeowners during the boom years, and then they profited again when the loans failed,” Leibo-witz said.

It will take several months to contact the affected borrowers, Leibowitz said. He called Countrywide’s record-keeping “beyond abysmal.”

Banks have not done enough to prevent foreclosures because of the income they receive from these sorts of fees, consumer advocates allege. In a 2007 conference call with investors that was cited by FTC lawyers, a top Countrywide executive called such fees “part of our diversification strategy” as foreclosures soared.

“This is an ongoing problem,” said Diane Thompson, a lawyer with the National Consumer Law Center. “Those default fees are huge barriers to loan modifications.”

The FTC also alleged that Countrywide made false claims to borrowers in bankruptcy about the amount owed or the size of their loans — and failed to tell those borrowers about fees or other charges. The settlement requires Bank of America to give bankrupt borrowers monthly notices about what they owe, including fees.

Bank of America has dealt with allegations of deceptive practices at Countrywide since acquiring the mortgage company. In October 2008, it reached a settlement with attorneys general agreeing to modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 customers.

It has abandoned the tarnished Countrywide name and remains the largest collector of mortgage payments in the country.

The FTC is charged with enforcing federal laws designed to prevent abuses by companies that collect consumers’ debts. That’s because mortgage-collection activities are typically handled outside the oversight of federal banking regulators.

Critics say the agency lacks the expertise or resources to enforce those laws. A sweeping financial overhaul being negotiated by Congress would create a new agency focused specifically on consumer financial protection.

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