The Consumer Financial Protection Bureau, May 11, 2020, entered a settlement with a loan servicing company in regards to its mortgage servicing practices.

As a result of the consent order, the company must:

●       Provide redress payments of $775,000.

●       Pay a civil money penalty of $250,000.

●       Provide for the waiver of $500,000 in borrower deficiencies.

●       Develop and implement procedures that ensure compliance with the Real Estate Settlement Procedures Act and its implementing regulation, Regulation X.

The CFPB investigation allegedly found evidence of law violations in the company’s handling of loss-mitigation applications. The identified law violations are as follows:

(1) Violation of the RESPA, Regulation X, and the Consumer Financial Protection Act of 2010 by taking prohibited foreclosure acts against certain borrowers who qualified for protection from foreclosures.

(2) Violation of the RESPA, Regulation X, and the CFPA by failing to send evaluation notices to entitled borrowers in a timely manner.

Under the settlement, the company must follow provisions and submit a plan to ensure that all loss-mitigation and foreclosure procedures comply with Federal consumer financial laws and the terms of the consent order. For 5 years, the company must provide copies of this consent order to a number of parties, including future partners, vendors, and certain employees.

More information on the case can be found in the CFPB consent order, or by contacting Troy Garris at troy@garrishorn.com.