Consumer protection laws Mortgage News

Carrington Mortgage Services Enters into Settlement with the Consumer Financial Protection Bureau

Carrington Mortgage Services Enters into Settlement with the Consumer Financial Protection Bureau

Carrington Mortgage Services is proud to have helped more than 134,000 consumers obtain relief during the COVID pandemic and, despite its business decision to settle, maintains that the CFPB’s position ignored key facts and the law

Carrington Mortgage Services, LLC (Carrington) agreed to settle with the Consumer Financial Protection Bureau (CFPB) to fully resolve the CFPB’s claims relating to consumers who sought forbearances under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Carrington is settling, without admitting or denying the CFPB’s claims, to put this matter behind it and avoid the cost and distraction of prolonged litigation, despite its disagreement with the CFPB’s position. The CARES Act required mortgage servicers to implement complex regulatory requirements during the course of a single weekend, which Carrington did successfully, and throughout the early weeks and months of the pandemic when guidance was scarce and at times inconsistent. Despite its best efforts, where its execution was not perfect, those issues were corrected by Carrington and, in any event, did not result in consumer harm.

“Rather, this matter is an aggressive and unfortunate example of regulatory overreach.”

Carrington is one of the nation’s longest tenured and most respected non-bank servicers. Its near 15-year record of exemplary regulatory performance clearly demonstrates its commitment to borrowers and compliance with the law. Since the early stages of the pandemic, Carrington worked tirelessly to help borrowers in need, completing more than 134,000 forbearance agreements with its customers, all while taking its own operations remote to protect the safety and well-being of its employees. Data shows these efforts were extremely successful: just over 94% of those borrowers seeking assistance successfully resolved their delinquency after forbearance or remain on a forbearance agreement as they need continued payment relief. Mortgage servicing relies heavily on human interaction with borrowers in challenging financial situations; and nonetheless, Carrington’s commitment to effectively serving its more than 650,000 borrowers is resolute.

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“In trying to help borrowers affected by the COVID-19 pandemic, Carrington acted in good faith and focused on delivering a benefit to consumers,” said Bruce Rose, CEO and Founder of The Carrington Companies, parent company of Carrington. “I am proud of what our people were able to do for borrowers suffering in the midst of the pandemic. The settlement does not demand additional consumer remediation, which reflects the lack of consumer harm in this matter.”

The CFPB’s decision to pursue this matter also plainly contradicts its own repeated assurances to the industry and lawmakers that it would credit those servicers that “put struggling families first,” and that it would take a “flexible” supervisory approach that considered “the circumstances that entities face(d) as a result of the COVID-19 pandemic and entities’ good faith efforts to comply with their statutory and regulatory obligations.”

“The CFPB’s allegations and enforcement actions reflect neither,” said Mr. Rose. “Rather, this matter is an aggressive and unfortunate example of regulatory overreach.”

Although Carrington disagrees with the CFPB’s position, it cooperated fully throughout the investigation, and is pleased to move forward. Agreeing to the settlement reflects Carrington’s desire to focus its attention on continuing to support its customers through product offerings and services that accommodate a wide range of consumers, and that support families across the United States through all phases of their homeownership journey.

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“After spending the past two years cooperating with the CFPB – which was recently declared to have an unconstitutional funding mechanism by the U.S. Court of Appeals for the Fifth Circuit – and educating them on the actions taken to assist borrowers in the midst of a pandemic, they have failed to understand our business and the rapidly changing environment,” said Mr. Rose. “The CFPB’s use of extortion tactics as its primary tool for regulation does nothing to help the industry or consumers. Ultimately, it is consumers who eventually pay more because of the additional regulatory costs imposed on lending and servicing. The Carrington Companies’ commitment to its customers remains steadfast and unwavering; and we will continue to provide assistance to consumers in need, including those still impacted by the pandemic.”

The Carrington Companies

Carrington is a holding company whose primary businesses include asset management, mortgages and real estate transactions. Collectively, the businesses are vertically and horizontally integrated, and provide a broad range of real estate services encompassing nearly all aspects of single family residential real estate transactions in the United States.

Through its collective associates made up of Carrington leaders and employees, the company’s nonprofit organization, Carrington Charitable Foundation, contributes to the community through causes that reflect the interests of Carrington Associates.

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