On April 21, 2015, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) announced a joint enforcement action and joint order with a national mortgage servicer. The CFPB and FTC alleged that the servicer failed to honor loan modifications transferred from other servicers and insisted that borrowers pay their original, higher monthly payments; demanded payments before providing loss mitigation options; delayed decisions on short sales; harassed and threatened overdue borrowers; and used deceptive tactics to charge consumers convenience fees.
To resolve the action, the servicer agreed to pay $48 million in restitution to borrowers and a $15 million civil penalty. It also agreed to correct the practices that were the subject of the complaint and the joint order, as well as establish and maintain a comprehensive data integrity program and refrain from violating the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Real Estate Settlement Procedures Act.
In a statement addressing the settlement, Mark J. O’Brien, chairman and chief executive officer of Walter Investment, of which the servicer is a wholly owned mortgage servicing subsidiary, emphasized that the servicer “ha[s] been and continue[s] to be committed to properly serving homeowners and helping them remain in their homes. We continue to develop and deploy best practices in our servicing operations and believe these standards will serve us well as we partner with our consumers to support them in their goal to achieve sustainable homeownership.”
This recent enforcement action is yet another indication of the CFPB’s ongoing scrutiny of mortgage servicers.