On December 22, 2022, the Massachusetts Attorney General (AG) announced a settlement with a South Carolina mortgage servicing company to resolve allegations that the company violated state mortgage servicing and debt collection laws.
After an investigation, the AG alleged that the servicer did not take “reasonable steps” to help borrowers avoid foreclosures as required by Chapter 244 of the Massachusetts General Laws. Specifically, the AG alleged that the servicer failed to conduct required assessments of borrower’s loans to determine if they were eligible for modification. The AG also alleged that the servicer made excessive debt collection calls to borrowers by making more than two debt collection calls within a seven-day period and failed to provide debtors with proper and timely notice of their right to seek validation under state law.
The terms of the assurance of discontinuance filed in state court require the servicer to pay $975,000 to be distributed at the AG’s discretion. Additionally, the servicer will discontinue the servicing and debt-collection practices which the AG alleged violated state law and agreed to compliance monitoring.
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