THE RIGHT THING: THE FINANCIAL COMPANY YOU KEEP

I shouldn't have been surprised, really, when the letter came in the mail.

We had spent weeks in a mortgage-approval process, during which the financial institution had scrupulously examined various aspects of our financial wherewithal.

It was a painstaking and occasionally annoying process -- my wife gleefully learned, for example, that she has a credit score 30 points higher than my own. But the institution had a reputation for being rigorous in its due diligence about prospective borrowers. For instance, the day before closing it called the college where I teach to confirm that I hadn't been let go since the last time it had called ... two weeks earlier.

We were pleased to be doing business with a company that not only gave us a decent rate, but also had managed to stay above the fray in the recent subprime-mortgage crisis, which had come about in large part due to some institutions making loans to people whom they knew weren't likely to be able to afford their monthly payments.

But then, shortly before our first mortgage payment was due, we received a letter informing us that our mortgage had been sold to another lender. We knew that this was a possibility, of course, since it had happened to us in our prior home-ownership experience. But this time the mortgage was sold to Countrywide Home Loans, an institution that had been caught up in the subprime mess.

We learned this in late August, which is when we also learned that Indiana had joined four other states in suing Countrywide for its lending practices. When Connecticut announced that it was suing Countrywide earlier in August, its complaint said that Countrywide's lending practices were "oppressive, unethical, immoral and unscrupulous."

Given the choice, my wife and I would not choose to do business with an institution that has a reputation for any one of these things, let alone all four. But our original lender was perfectly within its legal rights to sell our mortgage to another lender.

"This is another collision of ethics and reality," says Steve Rhode, the founder of The Ethical Banker, a Web site focusing on ethics in financial services. "From a consumer point of view it is wrong, and I think a consumer could demonstrate that they have been harmed to be sold to a lower-quality lender."

He also points out, however, that any effort to undo the sale would be a costly legal battle in which the consumer would be significantly outgunned.

If we wanted to, we could try to refinance our mortgage with another lender, absorbing a higher interest rate and more closing costs. Even then, however, doing so couldn't ensure that the new lender wouldn't turn around and sell us right back to Countrywide.

"It's dishonest for an institution to advertise `We're here for you' when really you're nothing but an asset that can be bought and sold," says John Waggoner, author of Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments. "Expecting kindness from your mortgage lender is like expecting kindness from a soft-shell crab."

So what's the right thing for us, or other consumers in similar situations, to do?

There's some solace in knowing that Countrywide is under new ownership, having been purchased by Bank of America in July. There's also comfort in knowing that the scrutiny under which Countrywide now finds itself is likely to keep it from behaving as questionably as it allegedly did in the past.

This doesn't eradicate the past behavior, of course. And it's unconscionable that consumers don't have more say in choosing the lenders with whom they ultimately do business.

But if Countrywide is forced to clean up its own house, perhaps we can live with having it finance ours.

c.2008 The New York Times Syndicate (Distributed by The New York Times Syndicate)