On August 7, the Massachusetts attorney general announced a $2 million settlement and an agreement for three years of compliance monitoring with a Texas-based loan servicer for alleged violations of Massachusetts’ debt collection, consumer protection and foreclosure prevention laws. According to the attorney general, the servicer failed to provide borrowers with a fair opportunity to prevent foreclosure, made excessive collection calls, and failed to provide debt validation notices as statutorily required.
The settlement, entered as an assurance of discontinuance, required the company to ensure subcontractors comply with Massachusetts law. In the event the company resumes direct loan servicing within the next five years, it must report and demonstrate improvements in compliance with state requirements.
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