The Consumer Financial Protection Bureau (CFPB) announced a new enforcement action against Carrington Mortgage Services for “cheating” homeowners out of CARES Act rights.
The CFPB alleges Carrington engaged in deceptive acts or practice relating to mortgage forbearances, in violation of the Consumer Financial Protection Act. The bureau found Carrington failed to implement many protections that were provided to borrowers with federally backed mortgage loans who were experiencing financial hardship during the COVID-19 pandemic.
The CFPB found Carrington misled certain homeowners who had sought a forbearance under the CARES Act. According to the bureau, Carrington told certain borrowers they were required to pay late charges they did not owe while their accounts were in forbearance.
Carrington also allegedly told certain homeowners they were required to remit their monthly payments “immediately,” and could face foreclosure proceedings if they did not do so, even though no payment was required nor could the homeowners face foreclosure proceedings. The company also misrepresented to homeowners that they needed to provide specific reasons to obtain a forbearance when they only needed to attest to financial hardship during the pandemic.
Additionally, the CFPB found Carrington illegally furnished information to consumer reporting companies that certain borrowers’ accounts were delinquent, rather than current, even though the homeowners’ accounts were current entering forbearance.
“Carrington Mortgage unlawfully withheld legally mandated pandemic protections, wrongly imposed fees, and reported false information to credit reporting companies,” CFPB Director Rohit Chopra said in a press release. “Homeowners were misled and denied key protections at a time when they were in most need of help.”
The CFPB is ordering Carrington to repay any late fees not already refunded, repair its faulty business practices, and pay a $5.25 million penalty that will be deposited into the CFPB’s victims relief fund.