CFPB Issues Consent Order Against Florida Servicer for Improper Foreclosure Practices

Late last month, the CFPB issued a Consent Order against a Florida-based mortgage servicer alleging that the Company engaged in improper foreclosure practices by failing to inform borrowers of foreclosure protections while actively moving forward with foreclosures against borrowers who had sought foreclosure relief, and that the Company failed to implement specific requirements set out in a prior Consent Order.

In the prior Order, issued in 2017, the CFPB concluded that the Company took too long to review applications for Loss Mitigation.  Further, the CFPB found that while the Company was reviewing borrower applications for foreclosure holds, the Company would also simultaneously move forward with foreclosure activity against the same borrowers in violation of Regulation X. 

The recent Consent Order alleges that the Company violated the 2017 Order by failing to develop and implement policies ensuring borrowers are protected from prohibited foreclosure activity, as well as failing to maintain and produce data regarding foreclosure activity and practices, as required by the 2017 Order.  In addition, the CFPB alleges that the Company continued to take prohibited foreclosure actions, failed to offer borrowers available mortgage assistance options, and overcharged for private mortgage insurance.

According to the CFPB, the Company’s recent violations and failures to comply with the 2017 Consent Order violated RESPA, TILA, the Homeowners Protection Act, and the Consumer Financial Protection Act of 2010.  The Company must pay $3 million in consumer redress and $2 million in penalties.  In addition, the Company must invest $2 million in updating its servicing technology.  Finally, the Consent Order places limits on the Company’s CEO if he fails to take actions necessary to implement the requirements of the Consent Order.

The Company neither admits nor denies the CFPB’s allegations.