4/21/15 UPDATE: THE FEDERAL GOVERNMENT HAS HELD GREEN TREE SERVICING ACCOUNTABLE.
Green Tree Servicing Allegedly Deceived Homeowners, Many of Whom Were Already in Financial Distress
A national mortgage servicing company will pay $63 million to resolve Federal Trade Commissionand Consumer Financial Protection Bureau charges that it harmed homeowners with illegal loan servicing and debt collection practices.
The FTC and CFPB allege that Green Tree Servicing LLC made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed, and failed to honor loan modification agreements between consumers and their prior servicers, among other charges.
Under the proposed settlement, Green Tree will pay $48 million to affected consumers and a $15 million civil penalty. The company also will stop its alleged illegal practices, create a home preservation plan for some distressed homeowners, and take rigorous steps to ensure that it collects the correct amounts from consumers.
“It’s against the law for a loan servicer to lie about the debts people owe, or threaten and harass people about their debts,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Working together, the FTC and CFPB are holding Green Tree responsible for mistreating homeowners, including people in financial distress.”
Green Tree has become the servicer for a substantial number of consumers who were behind on their mortgage payments at the time their loans were transferred to Green Tree. Because homeowners cannot choose their servicer, they are locked into a relationship with the company for as long as it services their loans.
Illegal Debt Collection Practices
According to the FTC and the CFPB, Green Tree’s collectors called consumers who were late on mortgage payments many times per day, including at 5 a.m. or 11 p.m., or at their workplace, every day, week after week, and left many voicemails on the same day. They also unlawfully threatened consumers with arrest or imprisonment, seizure of property, garnishment of wages, and foreclosure, and used loud and abusive language, including calling consumers “deadbeats,” mocking their illnesses and other struggles, and yelling and cursing at them. The company also allegedly revealed debts to consumers’ employers, co-workers, neighbors, and family members, and encouraged them to tell the consumers to pay the debt or help them pay it. The complaint also alleges that Green Tree took payments from some consumers’ bank accounts without their consent.
The agencies also allege that Green Tree pressured consumers to make payments via Speedpay, a third-party service that charges a $12 “convenience” fee per transaction, claiming it was the only way to pay, or that consumers had to use the service to avoid a late fee.
Mishandled Loan Modifications and Delayed Short Sale Requests
According to the complaint, in many instances, Green Tree failed to honor loan modifications that were in the process of being finalized when consumers’ loans were transferred from other servicers to Green Tree. This resulted in consumers making higher monthly payments, receiving collection calls, and even losing their homes to foreclosure. Green Tree also allegedly misled consumers about their loss mitigation options. The company told some consumers who were behind on their mortgages that they needed to make a payment to be considered for a loan modification, even for programs that prohibited the company from requiring up-front payments. In addition, Green Tree took up to six months to respond to consumers’ short sale requests despite telling them it would respond much more quickly. These delays caused consumers to lose potential buyers, miss other loss mitigation options, and face foreclosures they could have avoided.
Misrepresented Account Status to Consumers and Credit Reporting Agencies
According to the complaint, Green Tree misrepresented the amounts consumers owed or the terms of their loans. This included telling consumers they owed fees they did not owe, or that they had to make higher monthly payments than their mortgage contracts required. The company often knew or had reason to believe that specific portfolios of loans it acquired from other servicers contained unreliable or missing information. In many instances, it should have known that consumers had loan modifications from prior servicers and therefore owed lower amounts. And when consumers disputed the amounts owed or terms of their loans, Green Tree failed to investigate the disputes before continuing collections.
Green Tree also allegedly furnished consumers’ credit information to consumer reporting agencies when it knew, or had reasonable cause to believe, that the information was inaccurate, and failed to correct the information after determining that it was incomplete or inaccurate – often when consumers told Green Tree about it.
Proposed Settlement Order
In addition to the $63 million in monetary payments, the proposed settlement order includes provisions that require Green Tree to:
The proposed order also prohibits Green Tree from making material misrepresentations about loans, processing procedures, payment methods, and fees, from taking unauthorized withdrawals from consumer accounts, and from violating the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Real Estate Settlement Procedures Act.
The Commission vote authorizing the staff to file the complaint and proposed stipulated order was 5-0. The FTC filed the complaint and proposed stipulated order in the U.S. District Court for the District of Minnesota.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.
PLEASE READ: DUE TO AN OVERWHELMING NUMBER OF CALLS, WE RESPECTFULLY REQUEST THAT YOU REFER YOUR GENERAL COMPLAINTS ABOUT GREEN TREE SERVICING’S BUSINESS PRACTICES TO THE CONSUMER FINANCIAL PROTECTION BUREAU (www.consumerfinance.gov)
VICTIMS OF GREEN TREE SERVICING
AND BANK OF AMERICA
I. About Green Tree Servicing
Green Tree Servicing is one of the biggest servicers of home loans in the United States. It specializes in “servicing” (debt-collecting) subprime residential mortgages. The company’s unusually aggressive collection methods and other business practices are in question. Green Tree Servicing, LLC, is a wholly owned subsidiary of the publicly traded company Walter Investment Management Corp. (NYSE: WAC). Walter Investment Management is based in Tampa, Florida. Green Tree Servicing is led by Ms. Cheryl A. Collins, who has been Chief Financial Officer and Senior Vice President of the company since January 2006. Other key executives include Keith Anderson (President), Gregory D. Aplin (Executive Vice President), Jerry W. Britton (Executive Vice President), Mr. Richard G. Evans (Executive Vice President and Director).
Green Tree Servicing is based in St. Paul, Minnesota, and operates twenty-nine offices for its debt recovery operations. In recent months, Green Tree has acquired hundreds of thousands of at-risk loans. In January 2013, Bank of America (BOA) sold mortgage servicing rights (MSRs) on roughly 650,000 residential mortgage loans (worth $93 Billion) to Green Tree’s parent, Walter Investment Management Corp. Bank of America was recently sued for allegedly preventing loan and paying bonuses to foreclose on homeowners.
For many consumers who have had their mortgages transferred to Green Tree Servicing, it is the final unpleasant chapter in the mortgage meltdown. People whose mortgages have been passed along from lenders like Wells Fargo, Countrywide, Bank of America, and GMAC, are now stuck with Green Tree Servicing, LLC.
If recent calls are any measure, being introduced to Green Tree Servicing has not been a positive experience. In the past few months, upset Americans from Arizona to Vermont have voiced their opinions about Green Tree Servicing, such as “Green Tree is an evil company,” and “Green Tree employs mafia tactics.” One issue that remains to be seen is how consumers who were in the process of undergoing loan modifications during the time of the transfers will be affected. So far, the results have not been promising.
III. Bank of America and Green Tree Servicing – A Match Made in Hell?
DOES GREEN TREE CHARGE UNFAIR FEES? Does GTS impose unfair fees to process payments of any kind (late fees, delayed accepted of payments, telephone payments, Internet payments, etc)?
DOES GREEN TREE PROCESS PAYMENTS IN A TIMELY AND ACCURATE MANNER? Many have complained that Green Tree does not process mailed payments on time.
DOES GREEN TREE HARASS PEOPLE? Does Green Tree call account holders before 8:00 AM, after 9:00 PM, after being hung up on, or after being told to stop calling in writing? Do calls contain abusive or profane language, or outrageous threats? Does Green Tree contact third parties (i.e. co-workers, relatives, neighbors) and tell them about debts?
DOES GREEN TREE INTERFERE WITH LOAN MODIFICATIONS OR SHORT SALES? Several consumers have claimed they were unable to complete short sales because of Green Tree’s business practices.
There is a Facebook Group called “Victims of Green Tree Servicing. An anonymous insider from Bank of American (BAC) mailed this office an untraceable packet of information in a plain manila envelope.
The documents [PDF] blame Bank of America leadership for the way servicing of hundreds of thousands of mortgages was passed off to companies such as Green Tree Servicing. The anonymous insider specifically criticizes Tony Meola, Brian Moynihan, and Ron Sturzeneggar. According to Bloomberg, Brian T. Moynihan has been CEO and President of Bank of America since January 1, 2010. His total calculated compensation for 2012 was $8,321,300. Other key executives (with total calculated 2012 compensation: Bruce R. Thompson (CFO, $4.9M), Gary G. Lynch (Head of Compliance & Regulatory Relations, $3.3M), Thomas K. Montag (Co-COO, $6.3M), David C. Darnell (Co-COO, $4.3M).
The insider wrote:
“In order to sell the mortgage servicing rights (MSRs) for half of the 800k loans in the BAC book, they had to include approx. 1.5MM current loans. Successor servicers can then solicit HARP refis and get incentive from the govt.
These entities haven’t been under any scrutiny regarding TCPA and other consumer protection acts. They do not screen prior to making outbound calls. No one has cared, but now that numerous “good” borrowers are being sent their way, the right people are finally taking notice. Not many reputable servicers want the bad loans, so BAC is selling to Nationstar, Greentree and M&T. These entities are NOT regulated by the OCC and do not have to abide by the OCC consent order which outlines strict guidelines on dual tracking (can’t foreclose while a modification is in process), payment processing and single point of contact (SOPC) to assist the borrower. This also includes special treatment of borrowers impacted by the hurricane Sandy. It may mean that any modification currently in process with BAC will not be recognized and the borrower will proceed into foreclosure.
These entities haven’t been under any scrutiny regarding TCPA and other consumer protection acts. They do not screen prior to making outbound calls. No one has cared, but now that numerous “good” borrowers are being sent their way, the right people are finally taking notice.
Tony Meola joined BAC from Saxon mortgage early in 2011. Research the execs at Nationstar – many are buddies of Tony’s. Nationstar did not BAC due diligence for subservicing, but the connections allowed them to be approved (subservicing – you pay someone to service the loans, but keep the MSR).
Brian Moynihan, Ron Sturzeneggar and Tony Meola are well aware of the horrible reputation of these servicers. Brian received an email from client/friend who just learned his mortgage had been transferred. He was not pleased and shared a link to a consumer affairs website tracking Nationstar complaints. Brian did nothing buy forward to Ron, who did the same.
The deal was signed in January 2013. They should have thought of that prior to selling the MSRs to these entities; however, the were primarily concerned with getting the bad loans off their books, not with customer experience.
Under Tony’s leadership, BAC has failed at processing default loans. Ron is a dealmaker, not an operations guy. He was brought in to sell stuff. Any they both receive large bonuses.”
IV. What are the Terms of the Bank of American Consent Order with OCC?
It is one thing to accuse Bank of America of violating an agreement with a federal regulatory agency. It is quite another to prove such a charge. Anyone who has questions about the bulk transfer of Bank of America mortgages to third party servicers should read the OCC consent order is [PDF]. One of the terms of the order required Bank of America to assess third party servicers:
“…processes to perform appropriate due diligence on potential and current ThirdParty Provider qualifications, expertise, capacity, reputation, complaints, information security, document custody practices, business continuity, and financial viability, and to ensure adequacy of Third-Party Provider staffing levels, training, work quality, and workload balance;…” Article IV (d), page 11
V. Press about the Insider’s Revelations
Some weeks before the publication of his article BofA Solves Liquidity Problem By Circumventing National Mortgage Settlement – BofA Is Selling Servicing Rights To Unregulated Servicer, the leaked documents were presented for evaluation by the Leonard Law Office to Steve Dibert, mortgage fraud investigator. For a variety of reasons, we agreed that Mr. Dibert should use the material to write a story.
Excerpts from his June 21, 2013 article:
“Are you aware of the fact that your bank is turning its customers over to a processor that based on the complaints posted appears to not only lack basic competency but also poor customer service? Many of the complaints are former BofA customers, is this how you want your bank to be remembered?” -Charles Giannotti email to Bank of America CEO Brian Moynihan
“Greentree Servicing is so abusive that Class action lawyer Preston W. Leonard told me, “I’ve never received so many calls and emails complaining about a publicly-held U.S. company. It is astounding.” His Boston consumer protection law firm Leonard Law Office, is representing plaintiffs in a nationwide TCPA class action against Green Tree Servicing for allegedly placing as many as 100 robo calls to an account holder’s relative. You can read about his lawsuit here as well as the many complaints he has received from consumers about Green Tree.”
On Friday, June 28, 2013, Salon published an article entitled, New Bank of America whistle-blower emerges: More customer abuse secrets. Reporter David Dayen mentioned Leonard Law Office twice:
“All of this has come to a head in a class-action lawsuit filed by Leonard Law Office in Massachusetts against Green Tree Servicing…”
“Among the charges Leonard Law Office made against Green Tree were claims that the servicer imposed illegal fees to process any kind of payment; failed to process mailed payments on time; harassed borrowers by calling them at all hours of the night and using abusive language to try to collect on debts; and delayed or denied timely modifications.”
Several comments/points of clarification about Mr. Dayen’s article: (1) our class action complaint [PDF] is strictly at TCPA case; (2) We posed questions within this article/blog post about Green Tree (guided by complaints received by the office), but have made not “charges” against Green Tree regarding fees, payment processing, etc.
- “Any penalty would add to the more than $40 billion Bank of America has spent on disputes stemming from the 2008 financial crisis.”(Huffington Post, 10/23/13)
Help for Victims of Green Tree Servicing
Asking the Government for Help
There are numerous agencies to complain to should you wish to share negative experiences with Green Tree Servicing.
1. Complain to the Office of the Comptroller of the Currency (OCC) here.
2. Complain to the Federal Trade Commission (FTC) here.
3. Complain to the Consumer Financial Protection Bureau (CFPB) here.
4. Complaint to your local Attorney General
Self Help Section – Standing up for Your Rights
A. Ending Collection Calls from Green Tree Servicing
Federal law requires collection calls to cease upon written request. Fair Debt Collection Practices Act, 15 U.S.C § 1692 et. seq (“FDCPA”). After effective written notice of request for telephone contact to cease has been received by a debt collector, financial penalties of $500 – $1,500 can be awarded per violation.
Elements of an effective collection call termination strategy:
- In the letter, specify the name and address of the account holder/recipient of phone calls.
- Specify telephone numbers that you do not want called.
- Clearly request that future communication be in writing only.
- Send the letter by United States Postal Service Certified Mail, Return Receipt Requested to either the address indicated on correspondence from Green Tree, or to Green Tree’s registered agent in the account holder/call recipient’s home state.
- Finding the registered agent takes a little work. For example, to find Green Tree’s agent in Arizona, Google search “Arizona Secretary of State entity lookup”, and then type in “Green Tree Servicing.”
- Retain proof of delivery and return receipt. If the green signature card doesn’t come back, look up the tracking number on the USPS website and print out a record of delivery.
- Keep a telephone contact log and phone records to prove unpermitted calls received going forward. Calls on cell phones that are not picked up are harder to prove.
- If the calls continue, contact a local consumer protection attorney to bring a Fair Debt Collection Practices Act and/or state law fair debt collection claim. Here is a resource for finding a local lawyer who specializes in consumer law: National Association of Consumer Advocates.
B. Sample Cease and Desist Letter
Address: [ ]
Re: Account Number — [ ]
Date: [ ]
Dear Green Tree Servicing:
Pursuant to my rights under federal laws, I am requesting that you cease and desist telephonic communication with me or about me to third parties (i.e. family, friends, neighbors, employers, etc) in relation to this account, including, but not limited to this list of phone numbers: [ ].
Please direct future contact to me in writing only, addressed to my residential mailing address, which is listed above.
C. DEMAND TO SEE YOUR MORTGAGE NOTE!
Making a lender prove the debt is often a useful exercise. Here is a helpful tool from Service Employees International Union (SEIU) called, “Where’s the Note? — Did the big banks lose your mortage? — Demand to see your mortgage note.
According to the site: “Whether you are facing foreclosure, have an underwater mortgage, or are just a concerned homeowner, it’s important that you contact your bank and demand to see the original note on your mortgage. It only takes a few minutes using our free online tool.”
E. How to demand a copy of your note from Bank of America:
Sample Letter – Source: SEIU
Qualified Written Requests
PO Box 942019
Simi Valley, CA 93094-2019
[your name, address]
Bank of America:
This is a qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA). I own the property at the address listed above, and your bank services my mortgage.
Over the last several weeks there have been many stories documenting the problem that banks are foreclosing on homes without proof that they own the loan. I have learned that in many cases, banks like yours do not even know who owns the loans you service. Employees at several leading banks have admitted to rubber stamping tens of thousands of foreclosures every month, without even checking to make sure that the bank had a legal right to proceed with foreclosure. In some cases, banks allegedly falsified mortgage documents to cover up their mistakes. There have been reports of two banks trying to foreclose on the same home, banks foreclosing on homeowners who were current on their payments, and even of a bank foreclosing on a home where the homeowner had never taken out a mortgage to begin with. This is not merely a “technical problem”–it is the difference between having a warm bed at night and being out on the street.
As a homeowner and a customer of your bank, I am horrified. I had always believed that if I played by the rules, I would be protected, but now I know that banks like yours think the rules don’t apply to them.
To protect myself and my family, I need to know who owns my mortgage. Within sixty days, I would like to know the name, address, and phone number of the bank or investor that owns my mortgage. Furthermore, in light of the recent allegations of foreclosure fraud, I demand to see the original mortgage note proving ownership over my home loan. If you fail to produce a mortgage note proving that you have a right to collect my mortgage payments, I will be forced to consider all options available to me to ensure that my family and my home are protected.
I ask that I receive my response in writing. I understand that under Section 6 of RESPA you are legally required to acknowledge my request within twenty business days and must try to resolve the issue within sixty days.
Thank you for your attention to this matter.
D. Finding a Local Consumer Protection Lawyer to Represent You:
To find a local lawyer for issues like foreclosure defense, here is a resource from the National Association of Consumer Advocates: http://www.naca.net/find-attorney.
Complaints about Green Tree Servicing
- “This company is the devil.” (email)
- “Green Tree is about as worthless and greedy as they come.” (blog comment)
- “Green Tree is pond scum.” (email)
- “The manager I spoke with with extremely rude and unwilling to negotiate any terms.” (email)
- “Green Tree called my cell phone and I don’t even have account with them!” (phone)
- “I have never been spoken to before like this in my life.” (email)
- “Dealing with Greentree…has been a nightmare” (PissedConsumer.com)
- “…what kind of customer service is this, that a customer can’t get their balance or account info when they need it?” (Ripoffreport.com)
- “I have tried 4 times in 2 months to get my issue resolved with Greentree. They overcharged (doubled) our escrow amount.” (Consumeraffairs.com) – -1,092 Complaints.
- “This corporation should be tried for fraud, neglect and interference with trying to do everything in their power to stop, delay and prevent any type of short sale from going through.” (ConsumerAffairs.com)
A lawsuit by a Florida widow alleges that Green Tree Servicing debt collectors “hounded her husband to death with as many as nine caustic calls per day.” Read the the McLeod v. Green Tree Servicing Complaint (here).
Information exists on the Internet about Green Tree Servicing detailing potentially unlawful conduct. There are 83 pages of consumer complaints about Green Tree here.
There is even a Facebook page dedicated to complaints about Green Tree here.
Comment on this Post
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- Green Tree Servicing LLC – Dealing with Green Tree’s overreaching and draconian practices (usaconsumercomplaints.com)
- Two federal agencies investigating Walter Investment Management units (Tampa Bay Times)
- What the week’s big mortgage moves mean for consumers (Miami Herald)
- Fitch Monitoring Green Tree’s U.S. Resi Svcr Ratings Following Bank of America Announcement (Wall Street Journal MarketWatch)
- Current Cases: Class Action Against Green Tree Servicing, LLC & Ongoing Investigation into GTS’s Business Practices (theleonardlawoffice.com)
- Green Tree Servicing Accused Of Foreclosing On Dead People (mfi-miami.com)
- By the Numbers: A Revealing Look at the Mortgage Mod Meltdown (Propublica.org)
- BofA Solves Liquidity Problem By Circumventing National Mortgage Settlement (mfi-miami.com)
- Banks fall short in helping struggling homeowners (thedailyrecord.com)
- FRONTLINE investigates why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages (PBS.org)
- Foreclosing on Loan Mod Seekers: Mortgage Monitor Looks for Fix (American Banker)
- New Bank of America whistle-blower emerges: More customer abuse secrets (Salon)
- New BofA Whistleblower Reveals More Homeowner Abuse (rsn)
- Bank of America Schemes to Evade Settlement Rules and Pocket Cash (truthdig)
- Pomerantz Law Firm Investigates Claims On Behalf of Investors of Walter Investment Management Corp. – WAC (Marketwatch.com)
- Sapulpa Woman Fighting Loan Company’s Illegal ‘Bully’ Tactics (Newson6.com)
- CFPB Examiners Find Mortgage Servicing Business Remains a Sewer (NakedCapitalism.com)