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CFPB Cites Mortgage Servicer for Misleading Consumers

Wed 14 Jun, 2017  /  by McIntyre & Lemon  /   Client Alerts

06/14/17 – The Consumer Financial Protection Bureau (CFPB) has taken action against a mortgage servicer for allegedly failing to provide mortgage borrowers with the protections against foreclosure that are required by law.

The Illinois-based servicer services loans for borrowers across the country and is responsible for, among other things, creating and sending monthly statements to borrowers, collecting payments, and processing payments. For struggling borrowers, it administers short sale and foreclosure relief programs offered by the owner of the loan. These programs provide alternatives to foreclosure. The servicer is responsible for soliciting borrowers for these programs, responding to their applications in a timely way, determining eligibility, and implementing the foreclosure relief program for qualified borrowers.

According to the CFPB, the CFPB’s investigation found that the defendant violated the CFPB’s servicing rules by keeping borrowers in the dark about critical information regarding the process of applying for foreclosure relief. The Bureau also found instances where the servicer illegally launched or moved forward with the foreclosure process while borrowers were actively seeking help to save their homes.

The CFPB has ordered the servicer to pay up to $1.15 million in redress to consumers and offer borrowers opportunities to pursue foreclosure relief.

CFPB Press Release, Consent Order.