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Green Tree To Pay $63 Million In Penalties

The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission have ordered Green Tree Mortgage Servicing to pay $48 million in borrower restitution and $15 million in penalties to settle allegations of alleged servicing failures that occurred from 2010 to 2014.

Specifically, the regulators allege that 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, which specializes in servicing delinquent loans and markets itself as a “high touch” servicer, failed to honor loan modifications that consumers had entered with their prior servicers and insisted that the consumers pay their original, higher monthly payment, the CFPB alleges.

The company is also accused of failing to get the information and documentation from the prior servicer needed to accurately collect payments from consumers.

The CFPB says the special servicer resorted to illegal practices - including false threats, repeated calls and revealing debts to third parties, such as employers - to collect mortgage payments from consumers who fell behind on their loans.

This included demanding payments from consumers who had previously been approved for modifications under the federal government’s Home Affordable Modification Program, which does not require consumers to make payments while they are being considered for the program.

The CFPB also alleges that Green Tree dragged its feet when it came to handling short sales. The complaint says the company, in numerous instances, took two to six months to respond to consumer requests for short sales.

The regulators further accuse Green Tree of harassing consumers by way of its collection techniques: Specifically, the firm is accused of calling some borrowers as many as 20 times a day. Further, it is alleged that some of the company’s representatives told consumers that nonpayment could result in arrest or imprisonment. Some representatives also threatened seizure or garnishment of the consumer’s wages, the CFPB says in a release.

The servicer is also accused of steering consumers into using its Speedpay pay-by-phone service, for which consumers were charged $12, when, in fact, consumers could have used other payment services that do not charge fees in order to make payments to Green Tree.

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Agencies Finalize Rule Giving States The Ability To Supervise AMCs

The Office of the Comptroller of the Currency (OCC) and five other federal agencies have approved a final rule that gives participating states greater latitude for the registration and supervision of appraisal management companies (AMCs).

In accordance with Section 1124 of Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as added by Section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the minimum requirements in the final rule apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs.

The final rule does not compel a state to establish an AMC registration and supervision program, and there is no penalty imposed on a state that does not establish a regulatory structure for AMCs, the agencies explain in a release.

However, an AMC is barred by Section 1124 from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure.

Under the final rule, participating states must apply certain minimum requirements in the registration and supervision of AMCs.

An AMC that is a subsidiary of an insured depository institution and is regulated by a federal financial institution regulatory agency (a federally regulated AMC) must meet the same minimum requirements as state-regulated AMCs except for the requirement to register with a state.

The final rule gives participating states 36 months after the effective date to implement the minimum requirements.

Appraisals performed by AMCs registered in the states that adopted the rule must comply with the Uniform Standards of Professional Appraisal Practice. An AMC must also ensure the selection of a competent and independent appraiser and establish and comply with processes and controls reasonably designed to ensure that appraisals comply with the appraisal independence standards established under the Truth in Lending Act.

The final rule also requires the certifying and licensing agency of a participating state to have certain authorities, such as approving or denying initial AMC registration applications and renewal applications, examining and requiring the AMC to submit relevant information to the state and verifying that the appraisers on the AMC’s appraiser network or panel hold valid state certifications or licenses.

These other authorities include conducting investigations of AMCs to assess potential violations of appraisal-related laws - and the discipline that would follow. An AMC’s violation would result in a report to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

In addition to the OCC, the other agencies promulgating the new rule include the Board of Governors of the Federal Reserve System, the FDIC, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency and the National Credit Union Administration.

 

Morningstar Raises Vendor And Servicer Rankings For Green River Capital

Green River Capital LLC (GRC), a West Valley City, Utah-based provider of real estate owned asset management and loss mitigation services, says Morningstar Credit Ratings LLC has raised its ranking as a residential vendor in the asset management market as well as its ranking as a residential component servicer in the market for short sales.

According to GRC, the company is now ranked “MOR RV1” in the asset management market and is ranked “MOR RS1” in short sales. The forecast for both rankings is “Stable.”

As per Morningstar’s bulletin, these rankings reflect positively on GRC’s operational infrastructure and performance results in both of its roles. The “Stable” forecast “reflects solid performance for GRC’s client base and an enterprise-wide focus on audit, quality control, compliance and technology.”

Morningstar says, “GRC’s flexible business model and proprietary technology provide the company, both as a component servicer and vendor, market growth and a diversified business strategy, which are evident in recently introduced business ventures, such as collateral underwriting and property manager oversight and compliance for the single-family rental securitization market.”

Loan Administration

Green Tree To Pay $63 Million In Penalties

 

 

 

 

 

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