A civil money penalty of $200,000 and restitution of $36,000 must be paid by a Texas mortgage servicer under the terms of a settlement announced Wednesday by the federal consumer financial protection agency.
The Consumer Financial Protection Bureau (CFPB) in a release said it had reached the settlement with BSI Financial Services (BSI), a mortgage servicer in Irving, Texas. The bureau said BSI Financial Services is the operating name for Servis One, Inc.
The bureau said BSI, as of this mid-May, services approximately 48,600 loans with an aggregate unpaid principal balance of approximately $8.5 billion.
The company was charged with, from 2012-14, failing to ensure that information it obtained from prior servicers for mortgage loans it acquired was complete and accurate. The company was also charged with failing to honor some permanent loan modifications because of its failure to acquire the information and failure to enter into its servicing system loss mitigation information from prior servicers in a fully automated manner. “In other instances, Respondent failed to evaluate consumers’ pending loss mitigation applications for loan modifications or failed to offer permanent loan modifications upon consumers’ completion of In-Process Loan Modifications,” the agreement’s consent order states.
In its release, the bureau said it found that BSI:
- Handled mortgage servicing transfers with incomplete or inaccurate loss mitigation information. This resulted in failures to recognize transferred mortgage loans with pending loss mitigation applications, in-process loan modifications, and permanent loan modifications;
- Handled mortgage servicing transfers with incomplete or inaccurate escrow information resulting in untimely escrow disbursements;
- Inadequately oversaw service providers, resulting in untimely escrow disbursements to pay borrowers’ property taxes and homeowners’ insurance premiums;
- Failed to promptly enter interest rate adjustment loan data for adjustable rate mortgage (ARM) loans into its servicing system, resulting in BSI sending monthly statements to consumers that sought to collect inaccurate principal and interest payments; and
- Maintained an inadequate document management system that prevented BSI’s personnel or consumers from readily obtaining accurate information about mortgage loans.