Last week, the Consumer Financial Protection Bureau (CFPB) issued a consent order against Specialized Loan Servicing, LLC (SLS). The consent order came after the CFPB concluded its investigation into certain practices related to SLS’s mortgage servicing portfolio. Under the consent order, SLS must pay $775,000 to consumers as redress and waive an additional $500,000 in borrower deficiencies. The order also requires SLS to pay the CFPB a civil money penalty of $250,000. In addition to these monetary obligations, the consent order requires SLS to implement policies and procedures to address the regulatory violations, develop comprehensive compliance plans to ensure that these corrective policies and procedures comply with applicable law, and satisfy recordkeeping and compliance monitoring requirements.
The consent order addressed two issues. First, the CFPB found that SLS failed to comply with the foreclosure protections set forth in sections 1024.41(f)(2) and (g) of Regulation X. Section 1024.41(f)(2) prohibits mortgage servicers from making the first notice or filing in a judicial or nonjudicial foreclosure unless:
- They have provided written notice to the borrower that the borrower is ineligible for any loss mitigation option and the borrower’s right to appeal has been exhausted;
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