Cypress Mortgage Servicing obtained an assurance of discontinuance from Massachusetts Superior Courtroom in Suffolk County after agreeing to pay $2 million to settle legacy allegations.
The cost by the corporate, which beforehand operated as Rushmore Mortgage Administration Companies, will go towards a state penalty and borrower restitution. The court docket settlement requires enterprise observe change and monitoring. It doesn’t admit or show wrongdoing.
Massachusetts Legal professional Normal Andrea Pleasure Campbell’s statements in regards to the settlement level to renewed curiosity throughout the state associated to imposing legal guidelines round guaranteeing servicers comply with
Campbell stated in a press launch that the settlement “will assist guarantee compliance with significant client protections and put mortgage servicers on discover that Massachusetts won’t tolerate illegal practices that put revenue over folks.”
The corporate couldn’t instantly be reached for remark at deadline.
Cypress bought its mortgage portfolio and had rebranded as a grasp mortgage servicer “however retains the flexibility to subcontract direct mortgage servicers,” in response to the Massachusetts AG’s press launch. The corporate additionally retains the flexibility to work with debtors once more sooner or later.
The state’s considerations centered partly on mortgage modification allegations associated to state rule 35B, which requires ability-to-repay assessments, well timed responses to purposes when info is lacking, written assessments and disclosures important for negotiation.
“In lots of cases, Cypress unlawfully required shoppers to pay giant upfront down funds that weren’t topic to an affordability evaluation as a threshold requirement to getting into an in any other case reasonably priced mortgage modification,” the AG alleged.
The AG additionally alleged that the corporate didn’t comply with debt assortment guidelines round name limits and disclosures.
By way of enterprise observe necessities, the settlement with the state requires the corporate to make sure that its subservicers are compliant. If the corporate returns to its function as a direct servicer, it can “implement detailed enterprise observe modifications focusing on previous noncompliance.”
The state AG additionally entered into an settlement from Franklin Credit score Administration late final yr that settled alleged violations of debt assortment guidelines calling for sure forms of borrower communication and good-faith efforts to keep away from foreclosures.
In that settlement, the corporate agreed to pay a $300,000 penalty and stop collections on a portfolio of outdated second liens within the state begun after a protracted interval of inactivity. The transfer successfully erased $10 million in borrower debt associated to so-called zombie seconds.
Zombie seconds additionally had been the main focus of
Different current mortgage-related enforcement actions the Massachusetts AG has pursued embrace
The corporate stated not one of the 563 purchasers it has initiated 10-year agreements with since its founding in 2018 have reached the tip of their phrases or reported foreclosures.
“Hometap firmly believes within the integrity of our merchandise,” the corporate stated in a press release early this yr.
