Consumer Finance Insights
July 31, 2015

CFPB Issues Consent Order Against National Servicer for Unfair Mortgage Practices

On July 30, the Consumer Financial Protection Bureau (CFPB) announced that it entered into a consent order with a national mortgage servicing company, resolving claims that the servicer engaged in unfair and deceptive practices in violation of the Consumer Financial Protection Act.  The CFPB alleged that the servicer failed to honor modifications that consumers had entered into with their previous servicers; provided incorrect information to borrowers about such modifications; sent incorrect escrow statements to consumers; and illegally required consumers to waive certain future legal rights as a condition of receiving a payment plan.

Under the consent order, the servicer will pay $1.5 million in restitution, and a $100,000 civil penalty.  The servicer is also required to undertake certain efforts to help affected borrowers avoid foreclosure; honor loss mitigation agreements entered by prior servicers; create a data integrity program to ensure that it has accurate information about consumers’ loans; and make its loss mitigation application readily available on its website, among other things.