CitiMortgage and CitiFinancial Servicing have been fined $28.8 million by the Consumer Financial Protection Bureau for failing to help homeowners avoid foreclosure by using bad loss mitigation practices. Together the Citigroups will refund $21.4 million of the $28.4 million to over 45,000 consumers who were affected by the bad loss mitigation practices, and pay the remaining balance of $7.3 million in civil penalties.
CitiMortgage is being fined by the CFPB because they asked homeowners to submit an excessive number of documents when filling out a loss mitigation application to avoid foreclosure. Some of the documents requested from homeowners did not always seem necessary to process the application, but CitiMortgage made the documents a requirement. CitiMortgage would even sometimes make homeowners resubmit documents that had already been submitted.
Homeowners who tried to utilize CitiMortgage’s loss mitigation services also complained there was a lack of communication between the representatives and themselves. Some homeowners would have to deal with multiple CitiMortgage employees while going through the process of filling out the application and trying to determine what documents needed to be submitted. CitiMortgage will be refunding $17 million to consumers who were affected. CitiMortgage also announced they will be selling their mortgage servicing rights to other servicing companies and will end their mortgage servicing in the next few years.
CitiFinancial is being fined for confusing homeowners about how a deferment would affect their loans’ interest and violated RESPA for failing to treat deferments as a loss mitigation request. CitiFinancial would inform homeowners that interest would continue to grow during deferment periods, but failed to tell them how much the interest would grow and when they would pay it.
CitiFinancial also violated the Fair Credit Reporting Act (FCRA) by reporting the wrong information to credit reporting agencies. CitiFinancial sometimes reported accounts that had been settled as a charge off to the credit reporting agencies. The lawyers here at Doucet & Associates Co., L.P.A. help consumers fix errors on their credit reports. You can also read more information about how to fix a credit report error yourself on our website by clicking here, or you can send us a message online by clicking here.