CFPB Hits Servicer for Creating "Loan Modification Purgatory"
A Texasrnmortgage servicer has run badly afoul of the Consumer Financial ProtectionrnBureau (CFPB) for repeated violations of servicing rules. Residential Credit Solutions has agreed tornpay $1.5 million in restitution to its victims and a $100,000 civil money penaltyrnunder a consent agreement announced on Thursday.</p
CFPBrnhas a laundry list of complaints against the company which bills itself as specializingrnin servicing delinquent and “credit sensitive” mortgages loans. Since 2009 approximately 75,000 borrowersrnhave had loans transferred from other servicers to the company which has aboutrn$95 million in assets.</p
Thisrnenforcement action covers Residential Credit Solutions’ illegal practices priorrnto the January 2014 effective date of the CFPB’s new mortgage servicingrnrules. CFPB said the company:</p<ul type="disc"
CFPBrnsays the company’s actions put customers in loan modification trials in “loanrnmodification purgatory,” confusing them, and effectively setting them back as thoughrnthey had never received a trial modification. In many cases the company delayedrnor deprived borrowers of the opportunity to save or sell their homes. </p
In addition to the civilrnpenalty and redress to victims, who are not prevented by the payments from takingrnindividual action against Residential Credit Solutions, the company has agreedrnto convert in-process loan modifications into permanent ones and engage inrnoutreach efforts to offer borrowers loss mitigation options. It will also stop foreclosure processes forrncertain borrowers, if those are happening and honor plans put in place by priorrnservicers, continue processing applications for loss mitigation and end allrnmortgage servicing violations.
All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.
Leave a Comment
By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...Late-Stage Delinquencies are Surging
Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...Published by the Federal Reserve Bank of San Francisco
It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...