Massachusetts AG Obtains $4 Million in Settlement Over Subprime Mortgage Modifications

On December 21, 2018, the Massachusetts Attorney General’s Office (“Mass. AG”) announced that it had reached a settlement with a national mortgage servicer, resolving allegations that the company mishandled mortgage loans in violation of the Massachusetts Act Preventing Unlawful and Unnecessary Foreclosures, a 2012 law designed to protect borrowers from foreclosure caused by unfair terms on subprime mortgages.

The settlement brings to an end an investigation arising from consumer complaints that they could not reach representatives of the company in order to attempt to obtain loan modifications.  The company allegedly did not timely or efficiently review loan modification applications, failed to provide single points of contact for borrowers, mishandled calls from borrowers with limited English proficiency, and mishandled mortgages transferred from other servicers.

The settlement requires the company to pay $450,000 to the Commonwealth of Massachusetts and to provide $3.5 million in relief to borrowers through loan modifications.

Download PDF