If Green Tree serviced your mortgage from 2010 to 2014, you might be due some compensation for alleged wrongdoings.
Today, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) ordered Green Tree Servicing to pay $48 million in borrower restitution along with a $15 million fine to the CFPB’s Civil Penalty Fund.
CFPB Director Richard Cordray said in a release that the company “failed consumers who were struggling by prioritizing collecting payments over helping homeowners.”
This meant borrowers who could have kept their homes instead lost them to foreclosure, despite being on payment plans to get back on track.
Pay Your Mortgage or We’ll Arrest You
- Green Tree has been accused of some pretty bad stuff
- Including warning delinquent homeowners of imprisonment
- And doing little to help borrowers keep their homes
- Along with harassing phone calls and unresponsive customer service
Green Tree has been accused of a number of abuses, including not honoring loan modification programs, delaying short sale decisions, and charging customers “convenience fees” when paying their mortgages.
Apparently homeowners with prior foreclosure relief plans had their mortgages transferred to the company where they were not maintained, and instead asked that borrowers make their original, higher monthly payments.
Additionally, the company supposedly charged customers $12 for its pay-by-phone service and pressured borrowers into using it to ensure their payments were received on time.
Even worse, delinquent borrowers who called Green Tree were automatically routed to debt collectors rather than a loss mitigation specialist.
The company’s short sale department was also “frequently unreachable and unresponsive,” and it often took two to six months to receive a response to short sale requests.
If that’s not enough, Green Tree also allegedly called delinquent borrowers seven to 20 times a day if they were two weeks or more past due, sometimes as early as 5 A.M. or as late as 11 P.M.
Some reps told borrowers they were “deadbeats” and warned them that nonpayment of their mortgage could result in arrest or even imprisonment.
It’s unclear how much compensation each borrower will receive, but victims who receive money from this enforcement action can also pursue their own individual claims against the company.
Must Convert Temporary Loan Mods into Permanent Ones
- Assuming you managed to keep your home
- Any temporary loan modifications must be made permanent
- And all active foreclosures must be halted
- While the company evaluates loss mitigation alternatives
For those who still have their homes, Green Tree must convert temporary loan mods into permanent ones.
And for mortgages already in a loan modification program, Green Tree must honor loss mitigation agreements entered into by the prior loan servicer.
If a borrower is in the process of foreclosure, it must be halted while the company reaches out to borrowers and evaluates other potential loss mitigation options.
The company has also been ordered to halt all mortgage servicing violations, including how much consumers owe Green Tree. And acknowledge the receipt of short sale requests and/or missing documents within five days.
Green Tree is also barred from transferring loans in loss mitigation in or out of the company without all the proper paperwork and records in place.
Lastly, the company has been ordered to provide access to quality customer service so borrowers can actually save their homes from foreclosure instead of being pushed toward an arrangement that compensates Green Tree.
Walter Investment Management Corp. acquired Green Tree in 2011, and in August 2015, Green Tree Servicing and Ditech Mortgage Corp. linked up to create Ditech Financial LLC, also owned by Walter.
Tip: In October 2019, New Residential (now known as Rithm Capital) purchased Ditech’s forward Fannie Mae, Ginnie Mae, and non-agency mortgage servicing rights.
In mid-2022, Ditech posted a notice regarding distribution of any unclaimed borrower funds remaining in the Ditech estate.