By KIMBERLEY HAAS
Officials at the Consumer Financial Protection Bureau have ordered leaders at Carrington Mortgage Services to pay a $5.25 million penalty for deceptive acts or practices.
CFPB officials say that Carrington, a non-bank mortgage servicer that operates in all 50 states and is headquartered in Anaheim, Calif., violated the Consumer Financial Protection Act in connection with mortgage forbearances.
They allegedly found that Carrington failed to implement protections provided to borrowers with federally backed mortgage loans who were experiencing financial hardship during the COVID-19 public health emergency, according to a press release.
A key provision of the CARES Act, passed by U.S. Congress in 2020, was that mortgage servicers were required to provide forbearances of up to 180 days upon request, according to officials.
CFPB officials claim that homeowners who had sought a forbearance under the CARES Act were misled into paying improper late fees, were lied to about forbearance and repayment options, and that Carrington inaccurately reported the forbearance status of borrowers to Equifax, Experian, and TransUnion.
“Carrington Mortgage unlawfully withheld legally mandated pandemic protections, wrongly imposed fees, and reported false information to credit reporting companies,” CFPB Director Rohit Chopra said in a statement. “Homeowners were misled and denied key protections at a time when they were in most need of help.”
The CFPB is ordering leaders at Carrington to repay any late fees not already refunded and to repair its faulty business practices in addition to the $5.25 million penalty.
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