Photo (cc) by BasicGov
Mortgage-servicing company Green Tree Servicing LLC has agreed to pay $63 million to settle federal charges that it mistreated borrowers with illegal loan servicing and debt collection practices.
According to the Consumer Financial Protection Bureau, Green Tree “failed to honor modifications for loans transferred from other servicers, demanded payments before providing loss mitigation options, delayed decisions on short sales, and harassed and threatened overdue borrowers.”
In some instances, the CFPB said Green Tree called borrowers up to 20 times a day, yelling, cursing and unlawfully threatening them. Green Tree also allegedly revealed borrowers’ debts to their employers, friends and family.
Green Tree, which is headquartered in St. Paul, Minn., has agreed to pay $48 million in restitution to victims as well as a $15 million civil penalty. Green Tree must also help borrowers save their homes and honor loan modification agreements between borrowers and their prior servicers.
CFPB director Richard Cordray said in a statement:
“Green Tree failed consumers who were struggling by prioritizing collecting payments over helping homeowners. When homeowners in distress had their mortgages transferred to Green Tree, their previous foreclosure relief plans were not maintained. We are holding Green Tree accountable for its unlawful conduct.”
Green Tree specializes in servicing delinquent home loans. The CFPB and Federal Trade Commission allege that in many cases, the illegal actions of Green Tree delayed or removed the opportunity for borrowers to save or sell their home.
Mark J. O’Brien, chairman and chief executive officer of Walter Investment, which owns Green Tree Servicing, said in a statement:
“We believe this resolution is in the best interest of Green Tree, our consumers, our clients and our shareholders. As a company, we have been and continue to be committed to properly serving homeowners and helping them remain in their homes. We continue to develop and deploy best practices in our servicing operations and believe these standards will serve us well as we partner with our consumers to support them in their goal to achieve sustainable homeownership.”
What do you think of Green Tree’s conduct with borrowers? Share your comments below or on our Facebook page. And share this article on your Facebook page.