RoundPoint Mortgage Servicing Corp. has agreed to pay $975,000 to resolve multiple allegations in Massachusetts, including failure to adequately assist borrowers in avoiding foreclosure.
The Fort Mill, South Carolina-based servicer signed an assurance of discontinuance last week with the Massachusetts attorney general’s office, thereby avoiding further legal actions surrounding any infractions. Among the violations the state said RoundPoint had committed was neglecting to make “a good faith effort to help borrowers with certain unfair loan terms.” The filing involved a total of 57 federally backed mortgages serviced between 2016 and 2020, according to the office.
The assurance noted RoundPoint did not assess borrower income, debts and obligations when considering loan modifications, nor did it notify clients of the results of its review or their right to present a counteroffer.
“Homeowners need to be able to count on mortgage companies to provide them with accurate information and take required steps to help prevent foreclosures,” said Attorney General Maura Healey in a press statement.
The attorney general’s office also said RoundPoint consistently ran afoul of regulations surrounding debt collection, which specify that creditors cannot call a borrower more than twice in seven days. Nor “in thousands of instances” did RoundPoint provide clients who were behind on payments sufficient opportunity to validate or dispute the amount of the debt within five days as required after initially informing them of collection action.
“Although RoundPoint provided borrowers with notice of the debtor’s right to seek validation of their alleged debts at approximately 55 days past due, when RoundPoint considered the debt defaulted, such notice was untimely,” the filing said.
On top of its payment to the state, RoundPoint said it would make changes to its business practices and submit a monitoring report to the Massachusetts attorney general’s office every sixty days for the next two years.
RoundPoint had not responded to a request for comment at the time of this article’s publication.
A servicer and subservicer of loans backed by Fannie Mae and Freddie Mac, as well as government-sponsored mortgages, RoundPoint paid $1.6 million earlier this year to resolve a different legal charge, which alleged it had charged processing fees to clients making payments by phone or interactive voice-response systems. Such fees are in violation of U.S. Department of Housing and Urban Development policy.
In August, the servicer was purchased by a subsidiary of Two Harbors Investment, only two years after its acquisition by Freedom Mortgage. The deal is expected to close in 2023.
RoundPoint is not the only servicer to have faced legal action this year. In another proceeding, Select Portfolio Servicing agreed in February to pay $200,000 to settle a lawsuit regarding noncompliance with interest rate laws on foreclosed properties in New Jersey. At the same time, three servicing subsidiaries of Bayview Asset Management are being sued following a massive data breach exposing personal information of over 4 million clients.