American Home Mortgage Servicing Inc. (AHMS), a Coppell, Texas-based mortgage servicer, faces charges by Texas investigators of using unlawful and aggressive collection tactics and improperly misleading homeowners, Texas Attorney General Greg Abbott's office announced Monday.
An investigation revealed AHMS collectors also failed to credit homeowners who properly submitted their payments on time, and often falsely claimed that homeowners did not make payments so the company could justify profitable late fees or escrow accounts.
The defendant also did not always properly credit homeowners after collectors withdrew funds from the homeowners’ checking accounts. Because of the defendant’s illegal conduct, homeowners defaulted on their loans, leading to foreclosure proceedings, according to the AG's office.
The company further claimed to have a “Home Retention Team” to help struggling homeowners. Many customers found that AHMS could not qualify homeowners and that they were of no help to halt the foreclosure process. Some homeowners who actually obtained loan modifications found that their monthly payments increased rather than decreased.
The enforcement action by the AG's office reveals multiple violations of the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act (DTPA). The state of Texas is seeking civil penalties of up to $20,000 per violation of the DTPA. Officials at American Home Mortgage Servicing could not be reached for comment.