MAY 7, 2015 AT 12:00 PM
WINDS OF CHANGE BLOWING?
Since the Housing Crash and economic meltdown of 2008, caused by the unfettered greed and lawlessness of the Wall Street Banks in their rush to make billions through the
process known as loan securitization, it’s been a rare occurrence indeed where the government has taken a bank and mortgage servicer to task for alleged wholesale violations of consumers’ legal rights.
With the filing of a 43-page complaint against Green Tree Servicing in the U.S. District Court in Minnesota on April 21 of this year by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB), hopefully the winds of change are beginning to blow.
The allegations of wrongdoing against Green Tree are nothing short of stunning both in their importance and scope. Among other things, the government accused Green Tree of undertaking, on numerous occasions, the following forms of misconduct:
• Not properly considering homeowners for, or falsely denying them, mortgage relief under programs such as HAMP;
• Refusing to acknowledge loan modifications entered into by homeowners with mortgage servicers before Green Tree takes over the servicing;
• Deliberately disregarding homeowners’ rights to have accurate mortgage billings;
• Ignoring complaints by homeowners when they challenge its collection tactics;
• Harassing homeowners it claims are delinquent on their payments;
• Reporting false information to the credit reporting bureaus about homeowners whose mortgages it services.
Each of the above allegations represents a violation of one or more consumer protection statutes. Interesting, in an almost “by the way” fashion, the FTC and the CFPB point to a common denominator explaining why these violations may be occurring: Green Tree grades its employees’ performance based upon their collection efforts, rather than customer service efforts, in their dealings with homeowners.
WAKE UP CALL
If this lawsuit goes the way of previous cases where the government appears to be taking on the mortgage industry, Green Tree will agree to a “slap on the wrist” settlement and that will be the end of that.
However, the suit could have broad and long-lasting implications for all homeowners, both those whose mortgages are serviced by Green Tree and those not. The allegations serve as a wake-up call to homeowners to be constantly vigilant of the potential for mortgage servicing fraud. That fraud may come in the form of a denial of a loan modification, a refusal to recognize an already-agreed-to modification, erroneous billings, collection harassment, false credit reporting or in countless other ways.
Whatever your situation may be, the key to mortgage success is ferreting out the fraud and turning it back on the servicer.
Note from the author: If you have questions or comments regarding this or any Foreclosure Story article, or should you like to have a “free mortgage analysis,” please visit mcgookeylaw.com, visit us on Facebook or call us at 419-502-7223.
Kate Eyster and Lauren McGookey contributed to this article.
Copyright 2015 Daniel L. McGookey