Posted by NCBRC - May 6th, 2015
The Federal Trade Commission and the Consumer Financial Protection Bureau have announced a $63 million settlement in a dispute with the national mortgage servicing company, Green Tree Servicing. The FTC and CFPB charged Green Tree with thug-like collection methods including: barraging the debtor with phone calls as early as 5 a.m. and as late as 11 p.m.; threatening debtors with arrest, imprisonment, and garnishment; yelling at consumers and using obscene language; mocking illnesses and other personal situations causing financial distress; revealing debts to employers, neighbors, family; and taking payments out of debtors’ accounts without consent. It also failed to honor loan modifications, misapplied payments, provided incorrect creditor information to consumer reporting agencies, and overcharged or demanded unnecessary fees. $48 million of the settlement will go to affected consumers and $15 million represents civil penalties.
In addition to the $63 million dollars, the settlement requires Green Tree to clean up its act by implementing “a home preservation plan to offer options to consumers whose loans were transferred to the company during the time covered by the complaint.” It must cease collection on disputed debts until the completion of an investigation and verification of amounts owed. “The proposed order also prohibits Green Tree from making material misrepresentations about loans, processing procedures, payment methods, and fees, from taking unauthorized withdrawals from consumer accounts, and from violating the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Real Estate Settlement Procedures Act.” In short, the order requires Green Tree to competently and honorably perform the services a loan “servicer” is meant to perform.
Posted by NCBRC - October 16th, 2013
Without advance notice and with no opportunity to comment, the CFPB yesterday issued an interim final rule concerning the mortgage servicing regulations that take effect January 2014. The new rule now exempts servicers from the periodic statement requirement when the borrower is a debtor in bankruptcy. The CFPB states that the interim final rule “clarifies” its previous final rule on mortgage servicing, but the bankruptcy exemption is not a “clarification” of the previously issued rule. Rather, the new exemption marks a 180-degree reversal from its previous position. Previously, and rightly so, the CFPB found that the complexities of the bankruptcy scenario necessitated periodic statements for debtors. The rule allowed servicers to make changes in statements to reflect accurate payment obligations of the debtor, but put an end to servicers’ practice of stopping monthly statements to borrowers who filed for bankruptcy. Without statements, it is more difficult for homeowners to remain current on their mortgages post-petition. In developing the original rule the CFPB carefully considered input from various stakeholders and rejected a bankruptcy exemption for periodic statements. Since the CFPB sidestepped the notice and comment procedure in its recent about face on periodic statements and bankruptcy, it can only be presumed that the CFPB relied upon less public input in reversing its previous “carefully considered” decision. Shame on the CFPB!
Posted by NCBRC - February 4th, 2013
On January 17, 2013, the Consumer Financial Protection Bureau enacted mortgage servicing rules implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act provisions relating to the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). Read More
