Consumer Watchdog: Mortgage servicing firm compensates Duryea couple for mistake

Consumer Watchdog - Christine Young

I recently got an email from Stephen and Ann Yencha of Duryea, who had a problem that arose early this year, shortly after CitiMortgage transferred their mortgage payment processing to Green Tree Servicing.

A few months later they received a check for $1,776 from Green Tree for overpayment on their escrow account. Delighted, the Yenchas turned around and sent the money back to Green Tree, with instructions to apply it toward the principal balance.

Imagine their surprise when last February they received a notice from Luzerne County, saying they had failed to pay $1,664.91 in 2014 property taxes. Worse, the county had hiked the tab to $1,906.52, tacking on $241.61 in penalties and interest.

“In hindsight, maybe we should have wondered why we got the overage,” said Ann Yencha. “But in the past, as the principal has been reduced to a certain level, we’ve gotten refunds from our escrow account.”

They talked to CitiMortgage, who told them Green Tree should have paid the taxes instead of sending them a refund.

“CitiMortgage told us Green Tree assumed all responsibility when they got the mortgage.”

They called Green Tree, who advised them to just pay the bill out of pocket. The Yenchas were fine with covering the delinquent taxes but balked at shelling out $241.61 in interest and penalties for Green Tree’s mistake.

“We have been fighting with them since February 2015 to get the interest (and) penalties that are due to us,” they wrote. “We are constantly told it is being looked into and a case note is being put into our file, but nobody reads the case notes and every time we call, we get a different person.”

They tried asking for supervisors and got transferred to voicemail. They left messages and never got a call back. They got fed up and contacted their Consumer Watchdog.

“We are very conscientious about paying our bills on time and adding extra to payments, and it is totally frustrating to be given the run around,” they wrote.

I checked into Green Tree, whose parent company is Tampa-based Walter Investments, the seventh-largest residential mortgage servicer in the country.

I found a few red flags.

In December 2014, Green Tree purchased the mortgage servicing rights to a portfolio of mortgages from CitiMortgage — a little surprising because only a year earlier, Green Tree had failed eight compliance tests put into place by a $25 billion settlement that banks reached with federal regulators and 49 state attorneys general in 2012.

The settlement was reached after it was learned that the banks were robo-signing foreclosure documents and failing to accurately state how much borrowers owed during bankruptcy proceedings, among other questionable practices. As a result of the settlement, new servicing rules were put into place for banks and non-bank mortgage servicers.

Compliance tests conducted in late 2013 found that while many banks had mended their ways, Green Tree, a non-bank servicer, had not. Joseph A. Smith Jr., the settlement monitor, told reporters last year that Green Tree had failed more compliance metrics at any one time than all of the other banks and servicers; for example, failing to accurately state the amount due from borrowers during bankruptcy processing, starting foreclosure proceedings without showing the loans were delinquent, failing to give borrowers timely notification of a foreclosure, and refusing to waive fees and charges required by the settlement.

That’s not all. Green Tree also failed to comply with mortgage servicing rules enacted in January 2014 by the Consumer Financial Protection Bureau, and in April 2015 reached a settlement with the CFPB and the Federal Trade Commission, agreeing to pay $48 million in restitution to victims and a $15 million civil penalty for mistreating borrowers who were trying to save their homes from foreclosure.

The CFPB and FTC said Green Tree blew off modification agreements borrowers had made with previous servicers, dragged its feet on short sales and illegally harassed delinquent customers with threats of arrest or imprisonment, repeated phone calls, even revealing debts to their employers. Green Tree also allegedly tricked customers into paying $12 for its pay-by-phone service, telling them it was the only way to get their payment in on time when there were other payment options that were free.

The settlement requires Green Tree to clean up its act by correcting errors in its transferred loans and by providing “quality customer service.” If the Yenchas’ experience is any indication, Green Tree still has some work to do in that department.

I sent the Yenchas’ complaint to parent company Walter Investments and received an immediate reply from Vice President of Investor Relations Whitney Finch.

“I appreciate you notifying us of this issue and allowing us the opportunity to provide an appropriate resolution to the customer,” Finch said.

The next day I heard from Ann Yencha, who said she had gotten a call from Green Tree promising a check by overnight mail. Sure enough, a check for $241.61 showed up Wednesday afternoon.

“It’s the principle of right and wrong more than the money itself,” Ann said. “How many people has this happened to since Green Tree took over their mortgage? I appreciate your help very much. Thank you.”

Thank you, Whitney Finch. Green Tree sure could use more folks like you.

Consumer Watchdog

Christine Young

Christine Young is the Times Leader’s Consumer Watchdog. She can be reached at Her column appears weekly.

Christine Young is the Times Leader’s Consumer Watchdog. She can be reached at Her column appears weekly.

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