Op-Ed

Green Tree Must Pay $63 Million for Mistreating Borrowers

Published

10 years ago

April 27, 2015

By Charlene Crowell
NNPA Columnist

Consumers harmed by Green Tree Servicing, LLC, a major mortgage servicer, won an important victory. Joint enforcement actions by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) resulted in a return of $48 million to affected borrowers and a $15 million civil penalty fine, together totaling $63 million.

According to financial regulators from 2010-2014, Green Tree Servicing, LLC, mistreated mortgage borrowers who were trying to save their homes from foreclosures. The litany of charges reads like a financial nightmare for troubled homeowners:

• Misrepresentation of monies consumer owed or the terms of their loans;
• Failure to honor mortgage modifications made by earlier servicers;
• Sharing borrowers’ debts with employers and/or other third parties;
• Failure to investigate disputes before continuing collections;
• Threats of arrest, imprisonment, property seizure, and wage garnishments; and
• Calling borrowers and leaving voice mails at their homes and workplaces as early as 5:00 am and as late as 11:00 pm.

“Green Tree failed consumers who were struggling by prioritizing collecting payments over helping homeowners,” said Richard Cordray, CFPB director. “When homeowners in distress had their mortgages transferred to Green Tree, their previous foreclosure relief plans were not maintained. We are holding Green Tree accountable for its unlawful conduct.”

Sharing Director Cordray’s concerns, Jessica Rich, director of the FTC’s Bureau of Consumer Protection added, “It’s against the law for a loan servicer to lie about the debts people owe, or threaten and harass people about their debts.”

The irony is that Green Tree ‘specialized’ in servicing delinquent loans and took pride in being known as a “high touch” servicer. Nationwide, the firm ‘touched’ its borrowers; but in all the wrong ways.

In addition to the ills cited above, Green Tree was also charged with pressuring consumers to make payments to a third-party service that charged a $12 ‘convenience fee’ for every transaction. Some consumers were told that they had to use the service to avoid a late fee.

Other consumers who knew they were late in their mortgage payments were charged up-front payments, even for programs that banned upfront charges. Even borrowers who attempted to avoid foreclosures via short sales encountered unexplained delays up to six months, despite having been promised quicker actions.

“It is unfortunate to learn that these servicing ills,” said Paul Leonard, senior vice-president for federal policy at the Center for Responsible Lending. “No one deserves financial exploitation – particularly when it involves the single, largest investment many consumers make in a lifetime. Yet it is also an encouraging sign that joint enforcement actions can hold these services accountable.”

The enforcement actions are also a reminder that while consumers choose which lender to finance their home, they have no choice in selecting their servicer. And as with borrowers being serviced by Green Tree, it can be a costly difference.

In years gone by, many lenders also serviced their loans. Parents and grandparents typically received their mortgage from the same bank that held their checking and savings accounts. Customers knew their bank and trusted it to be fair and accurate.

The nation’s foreclosure crisis shattered many consumers’ trust of lenders – in addition to marked changes in today’s financial services marketplace.

Today, few mortgages are serviced by the lender that originated the loan. Instead, most loans are bundled and sold on the secondary market as investments. In the course of selling and re-selling, a single mortgage may have several servicers.

All too often, it is only when borrowers have a mortgage problem that they discover how their loan payments have been applied or related fees assessed. As servicers change, troubled borrowers can discover that their lending records have not always been kept accurately or in their entirety.

Because of FTC and CFPB, Green Tree will also be required to take several corrective measures:

• End all servicing violations;
• Provide quality customer service;
• Honor prior loss mitigation agreements;
• Help troubled borrowers to convert pending loan modifications into permanent ones;
• Offer written options to help troubled borrowers keep their homes, including those in which foreclosures have not yet been completed; and
• Create a detailed data integrity programs that tests, identifies and corrects errors in transferred loans.

What CFPB and FTC have ordered in Green Tree’s enforcement really reads like a best practices handbook. Here’s hoping other mortgage servicers will take note.

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.

###

Oakland Post

Posts by Oakland Post

Up Next

To Be Equal: Eradicating Childhood Poverty One Nose at a Time

Don't Miss

Beyond the Rhetoric: Clintons’ Financial Hustles

Oakland Post

Click to comment

Activism

Oakland Post Endorses Barbara Lee

Barbara Lee will be able to unify the city around Oakland’s critical budget and financial issues, since she will walk into the mayor’s office with the support of a super majority of seven city council members — enabling her to achieve much-needed consensus on moving Oakland into a successful future.

Published

4 weeks ago

April 2, 2025

Oakland Post

Congresswoman Barbara Lee. Courtesy photo, Office of Rep. Barbara Lee.

Former Congresswoman Barbara Lee. Courtesy photo.

As we end the celebration of Women’s History Month in Oakland, we endorse Barbara Lee, a woman of demonstrated historical significance. In our opinion, she has the best chance of uniting the city and achieving our needs for affordable housing, public safety, and fiscal accountability.

As a former small business owner, Barbara Lee understands how to apply tools needed to revitalize Oakland’s downtown, uptown, and neighborhood businesses.

It is notable that many of those who fought politically on both sides of the recent recall election battles have now laid down their weapons and become brothers and sisters in support of Barbara Lee. The Oakland Post is pleased to join them.

Oakland Post

Posts by Oakland Post

Activism

Actor, Philanthropist Blair Underwood Visits Bay Area, Kicks Off Literacy Program in ‘New Oakland’ Initiative

These community activations were coordinated with the San Francisco-based non-profit program “Room to Read.” Ray said he is also donating his time to read and take pictures with students to encourage their engagement and to inspire them to read more. The inspirational book “Clifford Ray Saves the Day” highlights Clifford Ray’s true story of saving a dolphin.

Published

2 months ago

February 18, 2025

Oakland Post

Blair Underwood (left) and Barbara Lee (right). Courtesy photo.

By Paul Cobb
New Oakland Series
Opinion Part 3

The Post mentioned three weeks ago that a number of our local luminaries were coming together to support the “New Oakland” movement. As this current national administration continues to eliminate our “legacy” institutional policies and programs left and right, most communities find themselves beyond “frozen” in fear.

Well, esteemed actor, long-time Bay Area supporter, and philanthropist Blair Underwood returned to Oakland this week to speak with city leaders, community trust agents, students, the Oakland Post, and local celebrities alike to continue his “New Oakland” initiative.

This week, he kicked off his “Guess Who’s Coming to Read” literacy program in some of Oakland’s middle schools. Clifford Ray, who played the center position of the 1975 World Champion Golden State Warriors, donated close to 1,000 books. Ray’s fellow teammate Charles “The Hopper” Dudley also gave Converse sneakers to students.

Underwood also spent quality time with the Oakland Ballers ownership group and visited the amazing Raimondi Park West Oakland community revitalization site. In the 1996 TV film Soul of the Game, Underwood played the role of the legendary first Black Major League Baseball player Jackie Robinson and commended the Ballers owners.

“This group of sports enthusiasts/ philanthropists needs to be applauded for their human capital investment and their financial capital investment,” Underwood said. “Truly putting their money and passion to work,” Underwood said.

Underwood was also inspired by mayoral candidate Barbara Lee’s open-minded invitation to bring public-private partnership opportunities to Oakland.

Underwood said he wants to “reinforce the importance of ‘collaborative activism’ among those most marginalized by non-empathic leadership. We must ‘act out’ our discomfort with passionate intentions to create healthy change.”

Oakland Post

Posts by Oakland Post

Activism

Councilmembers Ramachandran, Kaplan, Unger Identify Funds to Save Oakland Fire Stations

Our budget crisis – one of the worst in Oakland’s history – is compounded by the fact that people do not feel safe coming to Oakland due to our public safety crisis. By investing in our fundamental public safety resources today, we can send a signal to the world that Oakland is open for business. We have such a rich and vibrant culture, arts, and food scene that is worth celebrating – but we can only showcase this if we are able to keep our neighborhoods safe. Having fully functioning fire stations are absolutely essential to these efforts.

Published

2 months ago

February 18, 2025

Oakland Post

Councilmember Janani Ramachandran. Courtesy photo.

By Janani Ramachandran

There is no greater concern to the people of Oakland today than public safety. Fire stations are the bread and butter of essential city services – and every day that we have stations shuttered, we imperil the lives of our community members. In response to widespread outcry over the current and planned closure of stations, myself, along with Councilmembers Kaplan and Unger, have painstakingly worked to identify millions of dollars of new funding to save our stations. The legislation we introduced on Thursday, February 13th, will amend our budget to prevent the closure of four fire stations that are currently on the chopping block due to our budget crisis and will re-open two closed stations that have already been closed – Station 25 and 28 – in the near future. The resolution that will provide the funding to keep our stations open will go before the full City Council for a vote at our meeting on Tuesday, March 4^th at 3:30 PM – and we invite you to join us at City Hall to share your perspective on the topic.

With the devastating Los Angeles fire at the top of people’s minds, terrible memories of Oakland’s own wildfires are re-surfacing from the 1991 Oakland Hills Firestorm to the Keller fire just a few months ago – and how essential fire stations are to mitigating these catastrophes. But in Oakland, our fire stations don’t just fight wildfires – they also provide emergency medical services to our most vulnerable constituents, put out structural fires and encampment fires, and much more.

We recognize that there are a number of competing interests and important initiatives fighting for sparse City resources. But from my perspective, core safety services are the most pivotal functions that a City must spend its resources on – especially given the outcry we have heard around fire stations.

The fight to save our stations is not over. The resolution we introduced is a critical first step, and there are hurdles to overcome. If you support keeping our fire stations open, we invite you to be a part of the solution by making your voice heard at the March 4^th City Council meeting at 3:30 pm.