BOSTON — Allegations that a national mortgage servicing company violated Massachusetts state law by not taking any measures to help customers avoid foreclosure have been resolved with a $4 million settlement, according to Massachusetts Attorney General Maura Healey.
The settlement resolves the attorney general's claims that Shellpoint Mortgage, New Penn Financial LLC \violated the Massachusetts Act Preventing Unlawful and Unnecessary Foreclosures and the state's Consumer Protection Act. According to the Attorney General's Office, Shellpoint "mishandled" loans and did not work with homeowners who were attempting to avoid foreclosure.
“This settlement will put money back into the pockets of homeowners who were harmed and will ensure Shellpoint amends its practices and complies with the law,” Healey said in a statement. “We are committed to making sure Massachusetts residents are able to stay in their homes, particularly when their mortgages and loans have been mishandled by companies like this one.”
According to Healey's office, state law requires "creditors to make a good faith effort to avoid foreclosure for borrowers whose mortgage loans have unfair subprime terms."
The settlement includes a $3.5 million principal reduction established through a "loan modification program" and waving deficients incurred by homeowners when their properties sell for less than the amount they owe on their home, the Attorney General's Office said. Shellpoint will also pay $450,000 to the state of Massachusetts.