CFPB and FTC Fine Green Tree $63 million for Loan Servicing Abuses

HOUSINGWIRE - The Consumer Financial Protection Bureau and the Federal Trade Commission announced Tuesday that the organizations are taking action against Green Tree Servicing, a subsidiary of Walter Investment Management Corp. for “mistreating borrowers” who were attempting to save their homes from foreclosure.

According to the CFPB and the FTC, 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.

“Green Tree failed consumers who were struggling by prioritizing collecting payments over helping homeowners,” CFPB Director Richard Cordray said. “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.”

According to the CFPB and the FTC, Green Tree engaged in illegal practices when servicing loans that it acquired from other servicers.

Per the details of the complaint filed by the CFPB and the FTC, Green Tree failed to honor loan modifications that consumers had entered into with their prior servicers and insisted that the consumer pay their original, higher monthly payment.

Green Tree also failed at times to get the information and documentation from the prior servicer that it needed to accurately collect payments from consumers, the CFPB and the FTC said.

According to the CFPB and the FTC, Green Tree also demanded payments before providing loss mitigation options, delayed decisions on short sales, and resorted to illegal practices to collect mortgage payments from consumers who fell behind on their loans, including false threats, repeated calls, and revealing debts to third parties, like the borrowers’ employers.

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