Green Tree to Pay $48 Million in Borrower Restitution and $15 Million Fine for Servicing Failures
The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) took action against Green Tree Servicing, LLC, for mistreating mortgage borrowers who were trying to save their homes from foreclosure. The mortgage servicer 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 has agreed to pay $48 million in restitution to victims, and a $15 million civil money penalty for its illegal actions.
“Green Tree failed consumers who were struggling by prioritizing collecting payments over helping homeowners,” said CFPB Director Richard Cordray. “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.”
• Demanded payments before providing loss mitigation options.
• Failed to honor in-process modifications.
• Delayed short sales
• Harassed and threatened overdue borrowers
• Used deceptive tactics to charge consumers convenience fees.
This enforcement action covers Green Tree’s illegal practices prior to the January 2014 effective date of the CFPB’s new mortgage servicing rules.
Enforcement Action
If entered by the court, today’s order would require Green Tree to:
• Pay $48 million in redress to victims.
• Engage in efforts to help affected borrowers preserve their home.
• End all mortgage servicing violations.
• Adhere to rigorous servicing transfer requirements.
• Honor prior loss mitigation agreements.
• Provide access to quality customer service.
• Pay $15 million civil penalty: Green Tree will make a $15 million penalty payment to the CFPB’s Civil Penalty Fund.
Here is a copy of the proposed consent order and a copy of the complaint.
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