Green Tree Servicing Hit with CFPB Fine, so Rebrands Itself (Naturally)
In April of 2015, Green Tree Servicing agreed to pay a $63 million fine from the Consumer Financial Protection Bureau and the Federal Trade Commission for “mistreating borrowers” after failing to honor modifications for loans transferred from other servicers, demanding payments before providing loss mitigation options, delaying decisions on short sales, and harassing and threatening overdue borrowers. Green Tree agreed to pay $48 million in restitution to victims, and a $15 million civil money penalty to the CFPB’s Civil Penalty Fund for its illegal actions.
So what’s a shady mortgage servicing company with a sullied reputation to do?
Change its name, silly.
Green Tree’s parent company, Walter Investment Management Corp. (WAC), decided to merge Green Tree with another of Walter Investment’s subsidiaries, Ditech Mortgage Corp, to form a new company, Ditech Financial LLC. According to its corporate website, the new company will operate as ditech, a Walter company.
Readers may remember ditech commercials during the housing boom and subsequent bust of the early 2000’s. The company’s ubiquitous commercials were even parodied by Saturday Night Live, which featured a nefarious loan officer, played by actor Ron Michaelson, repeating the catchphrase “Lost another loan to Ditech!”
Green Tree’s website announces that the merger will be complete and effective on August 31. “Whether you’re purchasing a new home or looking to refinance your current mortgage, ditech can help you find the right solution for your needs,” the website states. “We look forward to serving you as a ditech customer.”
But this leopard may not be able to change its spots.
“Green Tree failed consumers who were struggling by prioritizing collecting payments over helping homeowners,” CFPB Director Richard Cordray said last April. “When homeowners in distress had their mortgages transferred to Green Tree, their previous foreclosure relief plans were not maintained. We are holding Green Tree accountable for its unlawful conduct.”
Time will tell if the new ditech will be more responsible or law-abiding in its loans or its servicing than its former incarnations.
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