On April 21, 2015, the Consumer Financial Protection Bureau (“CFPB”) and the Federal Trade Commission (“FTC”) reached an agreement with a national mortgage servicer to pay $48 million in restitution and a $15 million fine for mistreating borrowers trying to save their homes from foreclosure.
The CFPB and FTC allege that Green Tree Servicing, LLC, failed to honor loan modifications on transferred loans, demanded payments without providing loan mitigation options, delayed short sale decisions, used deceptive tactics to charge convenience fees to consumers, and harassed borrowers who were late on their loan payments.
Specifically, the CFPB and FTC said that from 2010 to 2014, the mortgage servicing company deprived borrowers of the chance to save their home from foreclosure by:
Failing to honor in-process loan modifications on loans transferred from other servicers and demanding that borrowers pay their previous higher mortgage payment.
Demanding payments before providing loss mitigation options by automatically forwarding calls from delinquent borrowers to a debt collector and informing borrowers they must make a payment before they could be considered for a loan modification, which is a violation of the Home Affordable Modification Program.
Delaying short sales by taking up to six months to respond to borrower requests for short sales.
Harassing overdue borrowers by calling those that were two weeks or more past due up to 20 times a day and informing them that nonpayment of their mortgage loans could result in their arrest or imprisonment.
Using deceptive practices to charge convenience fees by telling borrowers the only available payment method was the company’s pay-by-phone service, which charged borrowers $12 per payment.
In addition to remedying the alleged violations of the Real Estate Settlement Procedures Act (“RESPA”), the Fair Credit Reporting Act (“FCRA”), and the Fair Debt Collections Practices Act (“FDCPA”), Green Tree agreed to pay $48 million in redress to thousands of consumers and a $15 million civil penalty to the CFPB.
The attorneys at Glass & Goldberg in California provide high quality, cost-effective legal services and advice for clients in all aspects of commercial compliance, business litigation and transactional law. Call us at (818) 888-2220, send an email inquiry to info@glassgoldberg.com or visit us online at glassgoldberg.com to learn more about the firm and to sign up for future newsletters.
