The Consumer Financial Protection Bureau has reached a settlement with Specialized Loan Servicing LLC, a mortgage-loan servicer based in Colorado. The consent order requires the business 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 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.
In the settlement
, Specialized Loan Servicing consented to the order's issuance "without admitting or denying any of the findings of fact or conclusions of law," but consented to the facts necessary to establish the CFPB's jurisdiction.
The CFPB found that since January 2014, the lender 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. These violations also constitute violations of the Consumer Financial Protection Act of 2010. In some cases, Specialized Loan Servicing's violations of Regulation X short-circuited protections for consumers whose homes were ultimately foreclosed upon.
Under the settlement, Specialized Loan Servicing will pay $775,000 in restitution to affected consumers according to a redress plan that the CFPB will approve. The lender will also pay a $250,000 civil money penalty to the CFPB, and will waive $500,000 in borrower deficiencies. The settlement requires Specialized Loan Servicing 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 the company 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 servicer must also monitor its foreclosure activity to ensure that it complies with the policies and procedures that it must implement.
As of Feb. 29, 2020, Specialized Loan Servicing had a portfolio of mortgage loans worth about $112.69 billion.