Consumer Finance Insights
July 1, 2023

NJ AG Enters into Consent Order with Mortgage Servicer


On July 1, 2023, the New Jersey Division of Consumer Affairs, Office of Consumer Protection (Division) entered into a consent order with a national mortgage servicer. According to the Division’s press release, the company, which was formerly licensed in New Jersey before relocating to Florida, had violated the state’s consumer protection laws in its mortgage sale and servicing practices.

The Division alleged, based on 1,400 nationwide complaints, that the company violated the New Jersey Consumer Fraud Act (CFA), the state’s advertising regulations, and the state’s telemarketing do not call Law from January 2015 through June 2022. The Division specifically alleged that, among other things, the servicer made unsolicited telemarketing dales calls without being a registered telemarketer, engaged in abusive and deceptive telemarketing practices, engaged in “bait and switch” sales tactics, did not timely disburse escrow payments or apply mortgage loan payments (resulting in negative credit reporting and late fees), and failed to timely escrow refunds or respond to consumer inquiries accurately.

Pursuant to the consent order, the company agreed to a $502,000 settlement, including $365,200 in civil penalties and $136,800 in reimbursement for attorneys’ fees and costs.  The consent order states that $50,000 of the civil penalties would be suspended assuming the Company complies with the terms of the settlement. By way of injunctive relief, the company also agreed to appoint a Complaint Coordinator and that consumer complaints received by the Division would be forwarded to the Division’s Alternative Dispute Resolution Unit for binding arbitration if unresolved by the company.

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