Consumer bureau slaps mortgage servicer with orders for redress, money penalty

A Colorado-based mortgage-loan servicer was ordered to pay $1.275 million in redress and “waiver borrowers deficiencies” – plus a $250,000 civil money penalty (CMP) – for (among other things) taking foreclosure actions against borrowers who were entitled to protection, the federal consumer financial protection agency said Monday.

In a release, the Consumer Financial Protection Bureau (CPFB) said it has reached a settlement with Specialized Loan Servicing (SLS), LLC, of Highlands Ranch, Colo. According to the consent order, the bureau said, SLS is to pay $1.275 million in monetary relief to consumers in the form of redress and waiver of borrower deficiencies, pay a $250,000 civil money penalty, which will be paid to the bureau and deposited into the bureau’s Civil Penalty Fund, and implement procedures to ensure compliance with the Real Estate Settlement Procedures Act (RESPA) and its implementing regulation, Regulation X.

According to the agency, since January 2014, SLS violated RESPA and Regulation X by taking prohibited foreclosure actions against mortgage borrowers who were entitled to protection from foreclosure and by failing to send or to timely send evaluation notices to mortgage borrowers who were entitled to them. “In some cases, SLS’s violations of Regulation X short-circuited the protections against foreclosure for consumers whose homes were ultimately foreclosed upon,” the bureau stated.

SLS will pay $775,000 in restitution to affected consumers, according to a redress plan that the bureau said it will approve. The company will also pay a $250,000 civil money penalty to CFPB, the agency said, and will waive $500,000 in borrower deficiencies.

“The settlement requires SLS to implement policies and procedures that will ensure that borrowers receive the protections from foreclosure to which they are entitled under RESPA and Regulation X, including preventing SLS from improperly making first filings, from improperly moving for foreclosure judgments or orders of sale, and from conducting foreclosure sales against borrowers who have submitted timely and facially complete or complete loss-mitigation applications,” the bureau said.

SLS must also monitor its foreclosure activity to ensure that it complies with the policies and procedures that it must implement, according to the agency.

Consumer Financial Protection Bureau Settles with Specialized Loan Servicing (SLS), LLC

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