On January 3, a mortgage servicer entered into a $45 million settlement with 49 state attorneys general and the District of Columbia for alleged mortgage servicing delinquencies. The settlement resolves a complaint, filed on the same day in the D.C. District Court, that alleges that between 2009 and 2012 the servicer, among other things, failed to (i) timely and accurately apply payments; (ii) maintain proper documentation to establish standing for foreclosure; (iii) respond to borrower complaints and reasonable requests for assistance; (iv) properly process loan modification applications; and (v) properly oversee third party vendors responsible for foreclosure operations. The $45 million settlement payment includes $30.4 million in restitution to homeowners; $5 million in attorney’s fees and investigative costs and fees payable to the state attorneys general whose offices led the investigation; and almost $9 million in administrative penalties to state mortgage regulators. In addition to the settlement payments, the settlement also requires the mortgage servicer to comply with a set of “Servicing Standards” outlined in the consent judgment and to submit quarterly reports to the state attorneys general Executive Committee for a period of three years.
In response to the settlement, the mortgage servicer stated that it admits no wrongdoing and is currently using the adopted new Servicing Standards.