Specialized Loan Servicing settles CFPB allegations

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Specialized Loan Servicing will pay more than $1 million to settle Consumer Financial Protection Bureau allegations that it foreclosed on protected consumers and failed to send required evaluation notices in 2014.

The payments cover monetary relief to consumers and a civil penalty. The company has also agreed to take measures to ensure future compliance with the Real Estate Settlement Procedures Act.

Among other things, SLS has pledged to avoid improprieties in first filings, foreclosure judgments and orders of sale. It also has promised to avoid conducting foreclosure sales against borrowers who have submitted timely loss-mitigation applications.

In other recent settlement-related mortgage news, Guaranteed Rate late last month agreed to pay more than $15 million to resolve allegations it improperly originated and underwrote mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.

Guaranteed Rate had allegedly violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act by not properly ensuring its underwriting was in keeping with FHA and VA rules.

The allegations in that case were based on investigations of a whistleblower complaint by the U.S. Attorney's Office for the Northern District of New York, the Department of Justice's civil division, the VA's inspector general, the Department of Housing and Urban Development and HUD's IG.

Allegations against Guaranteed Rate were based on conduct going as far back as January 2008.

"This recovery on behalf of FHA and the American taxpayer should serve as a stark reminder of the potential consequences of not adhering to HUD program rules and to the value of whistleblowers, in pursuing lenders that violate these rules," HUD Inspector General Rae Oliver Davis said in a press release.

Guaranteed Rate received some credit in the settlement for being proactive in its efforts to correct what were allegedly "serious, systemic and widespread violations."

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CFPB RESPA Foreclosures Loss mitigation FHA False Claims Act The VA HUD