The owner of Green Tree Servicing LLC has responded to the settlement announced this week with the Federal Trade Commission and Consumer Financial Protection Bureau.
Green Tree agreed to pay $48 million in restitution and another $15 million civil penalty for allegedly mistreating mortgage borrowers who were trying to save their homes from foreclosure. The FTC and CFPB allege that the company made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed and failed to honor loan modification agreements between consumers and their previous servicers.
Green Trees owner, Walter Investment Management Corp., released a statement from Mark J. OBrien, chairman and CEO:
"As a company, we have been and continue to be committed to properly serving homeowners and helping them remain in their homes. We continue to develop and deploy best practices in our servicing operations and believe these standards will serve us well as we partner with our consumers to support them in their goal to achieve sustainable homeownership.
"With this settlement, the company and our employees will maintain our focus on the continuous improvement of our procedures and practices which will benefit all consumers and all stakeholders. We will continue to work closely with regulators, clients and other constituencies to ensure that we maintain the significant alignment of interests that exists in the mortgage servicing industry."
Green Tree, based in St. Paul, Minn., developed its 2015 business plan taking the terms of the stipulated order into account and the issuance of the settlement order does not alter that business plan, Walter Investment stated.
The settlement resolves allegations from an investigation that began in 2010. It would require Green Tree to work to help affected borrowers preserve their home, adhere to strict servicing transfer requirements, honor earlier loss mitigation agreements and provide access to quality customer service.
Green Tree is the servicer for a large number of consumers who were behind on their mortgage payments at the time their loans were transferred to Green Tree. Because homeowners cannot choose their servicer, they are locked into a relationship with the company for as long as it services their loans.
According to the complaint, this resulted in consumers making higher monthly payments, receiving collection calls, and even losing their homes to foreclosure. Green Tree also allegedly misled consumers about their loss mitigation options.
Specific allegation from the FTC and the CFPB include Green Trees collectors calling consumers who were late on mortgage payments many times per day, including at 5 a.m. or 11 p.m., or at their workplace.
The FTC and CFPB also allegedly the company unlawfully threatened consumers with arrest or imprisonment, seizure of property, garnishment of wages, foreclosure and used abusive language.
The complaint further alleges that Green Tree took payments from some consumers' bank accounts without consent. The agencies allege that Green Tree pressured consumers to make payments via Speedpay, a third-party service that charges a $12 "convenience" fee per transaction, claiming it was the only way to pay, or that consumers had to use the service to avoid a late fee.