Mortgage Servicers Kept Borrowers in the Dark About Options, Demanded Excessive Paperwork

Source: www.consumerfinance.gov

The Consumer Financial Protection Bureau (CFPB) today took separate actions against CitiFinancial Servicing and CitiMortgage, Inc. for giving the runaround to struggling homeowners seeking options to save their homes. The mortgage servicers kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief.

"Citi's subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes," said CFPB Director Richard Cordray. "Consumers were kept in the dark about their options or burdened with excessive paperwork. This action will put money back in consumers' pockets and make sure borrowers can get help they need."

Specifically, CitiFinancial Servicing:

• Kept consumers in the dark about foreclosure relief options:
• Misled consumers about the impact of deferring payment due dates
• Charged consumers for credit insurance that should have been canceled
• Prematurely canceled credit insurance for some borrowers
• Sent inaccurate consumer information to credit reporting companies
• Failed to investigate consumer disputes

Under the consent order, CitiFinancial Servicing must:

• Pay $4.4 million in restitution to consumers
• Clearly disclose conditions of deferments for loans
• Stop supplying bad information to credit reporting companies
• Pay a civil money penalty