Print Friendly and PDF
Medicare celebrates 50th Anniversary
Why hospitals are making patients sicker

Mortgage company that illegally blocked consumers’ attempts to save their homes to pay $1.5 million

Foreclosure SignResidential Credit Solutions has agreed to pay $1.5 million in restitution to victims for blocking consumers’ attempts to save their homes from foreclosure.

It failed to honor modifications for loans transferred from other servicers, treated consumers as if they were in default when they weren’t, sent consumers escrow statements falsely claiming they were due a refund, and forced consumers to waive their rights in order to get a repayment plan, the Consumer Financial Protection Bureau said Thursday.

Residential Credit Solutions also will pay a $100,000 penalty for its illegal actions.

“By failing to honor loan modifications already in place, Residential Credit Solutions put consumers through more headaches but in some cases cost consumers their homes,” said Richard Cordray, director of the bureau.

Since 2009, about 75,000 borrowers have had their loans transferred to Residential Credit Solutions. The company specializes in servicing delinquent loans and “credit-sensitive” residential mortgage loans, where the borrower is at high risk for default.

In many cases, the company deprived borrowers of the ability to make an informed choice about how to save or sell their home, caused borrowers to drop out from the loss mitigation process entirely, and drove borrowers into foreclosure, Cordray said.

The company:

  • Failed to honor in-process modifications.
  • Provided incorrect information.
  • Misrepresented to consumers that they had extra money in escrow and were due a refund.
  • Forced consumers to waive certain rights to get a payment plan.

Enforcement action

The order requires Residential Credit Solutions to:

  • Pay $1.5 million in restitution to victims.
  • Engage in efforts to help affected borrowers preserve their homes.
  • Honor prior loss mitigation agreements.
  • End all mortgage servicing violations.
  • Adhere to rigorous servicing transfer requirements.
  • Make loss mitigation applications readily available.
  • Pay a $100,000 civil penalty.
Copyright 2015, Rita R. Robison, Consumer Specialist


Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)