Green Tree Servicing LLC, a national residential mortgage loan servicer, will pay $232,000 to Vermont consumers and the state for the firm's faulty debt collection practices and the late payment of property taxes, according to Vermont Attorney General William Sorrell's office.
State regulators found evidence that Green Tree, since 2011, violated collection prohibitions at least 26 times in servicing mortgage loans in Vermont. The company reportedly routinely paid "borrowers local property taxes out of escrow funds provided by the borrowers." Collection calls sometimes violated state law - including calls made after 9 p.m., calls made to debtors at their place of work and and calls to third parties that reveal a debt is owed.
Sorrell's office considers the late payment of escrowed property taxes to be an unfair trade practice but Green Tree paid property taxes more than 30 days after the tax due date on the accounts of 48 Vermont consumers, including a number of payments made more than 100 days late. Green Tree argued that it ultimately corrected those errors and that none of the homeowners had to pay late fees or penalties.
The settlement is the first in Vermont focusing on mortgage-related issues since a series of multistate and federal settlements with national banks and servicers. "We must ensure that home mortgages, which are so central to the financial well-being of Vermonters, are serviced in accordance with the law," Sorrell said.
Green Tree will pay consumers a total of $55,250 for the collection violations and late payment of property taxes. The company will pay $176,750 to the state.
The settlement specifically requires Green Tree to pay $1,000 to each consumer whose property taxes the company paid more than 30 days late; $1,000 to each consumer contacted at work after being instructed not to do so, or with respect to whom calls were made to third parties; $500 to each consumer contacted after 9 p.m.; and $250 to each consumer contacted before 9 p.m., but whose call continued past that time. As a condition of receiving these payments, consumers will be required to release Green Tree from any further liability arising out of the facts described in the settlement.