WBK Industry News - Federal Regulatory Developments

Loan Servicer in $1.625 Million CFPB Consent Order for Regulation X, CFPA Violations

The CFPB recently entered into a stipulation and agreed to the issuance of a consent order with a Colorado loan servicer, requiring the servicer to pay a total of $1.625 Million through payments to affected consumers, waived deficiency fees, and civil money penalties, for allegedly failing to send proper notices to borrowers with loss mitigation applications and other servicing violations.  The consent order requires the servicer to revise and implement an approved compliance program and make ongoing reports to the CFPB.

The CFPB asserts that since 2014, the servicer engaged in prohibited first filings and foreclosure-related actions against borrowers with loss mitigation applications pending at times when the servicing regulations did not permit them to do so, and failed to send timely evaluation notices to borrowers in violation of Regulation X.  The CFPB alleges that these violations of Regulation X also constituted violations of the CFPA (Title X of Dodd Frank). 

The Order imposes a total of $1.625 Million on the servicer as follows: $775,000 to affected consumers; $500,000 in waived deficiency charges to borrowers; and $250,000 in civil money penalties.

The CFPB’s press release about the consent order is available here.