Non-Bank Servicer Enters into Settlement Agreement with Maryland

Recently, the Maryland Attorney General (AG) announced that a large, national non-bank servicer of home mortgages entered into a settlement agreement with the AG’s Consumer Protection Division and the State’s Commissioner of Financial Regulations.

The settlement stems from allegations that the servicer arranged for property inspections and passed the costs onto homeowners—in violation of Maryland’s prohibition against doing so.  The servicer allegedly conducted this practice until January 1, 2014, for forward mortgages and until February 2016 for reverse mortgages, and, in the process, purportedly assessed Maryland homeowners over $1 million in inspection fees.

Under the terms of the agreement, the servicer agrees: to cease the practice of charging homeowners for inspection fees; return an additional $260,000 in improper inspection fees allegedly charged to homeowners on top of the $827,759 the servicer has already refunded to consumers; and pay Maryland a penalty of around $500,000.