Why is Carrington Mortgage Under Investigation?
Carrington Mortgage Services, a prominent mortgage servicer and loan originator, is currently under investigation by various regulatory bodies and government agencies. The company has been accused of engaging in fraudulent activities, violating consumer protection laws, and mishandling loan modifications. In this article, we will delve into the reasons behind the investigation and explore the allegations made against Carrington Mortgage.
What is Carrington Mortgage?
Before we dive into the investigation, it’s essential to understand what Carrington Mortgage is and what they do. Carrington Mortgage Services is a mortgage servicer and loan originator that provides a range of services, including loan origination, loan servicing, and loan modification. The company has been in operation for over 30 years and has serviced millions of dollars in mortgage loans.
Why is Carrington Mortgage Under Investigation?
The investigation into Carrington Mortgage began in 2020, when the company was accused of engaging in fraudulent activities and violating consumer protection laws. The allegations made against the company include:
- Misrepresenting loan terms: Carrington Mortgage is accused of misrepresenting the terms of loan modifications to borrowers, including the interest rate, payment amount, and repayment period.
- Foreclosing on homes without permission: The company is alleged to have foreclosed on homes without obtaining the necessary permission from borrowers, often resulting in borrowers being evicted from their homes.
- Charging unauthorized fees: Carrington Mortgage is accused of charging borrowers unauthorized fees, including late fees, interest charges, and other penalties.
- Failing to honor loan modifications: The company is alleged to have failed to honor loan modifications agreed upon with borrowers, leading to continued foreclosures and financial hardship.
Regulatory Bodies Involved in the Investigation
The investigation into Carrington Mortgage is being conducted by several regulatory bodies, including:
- Federal Housing Administration (FHA): The FHA is a government agency that insures mortgage loans and provides financing to low-income borrowers. The agency is investigating Carrington Mortgage’s handling of FHA-insured loans.
- Consumer Financial Protection Bureau (CFPB): The CFPB is a government agency that regulates consumer financial products and services. The agency is investigating Carrington Mortgage’s alleged violations of consumer protection laws.
- State Attorneys General: Several state attorneys general have launched investigations into Carrington Mortgage’s activities, including allegations of fraud and deceptive business practices.
Impact on Borrowers
The investigation into Carrington Mortgage has significant implications for borrowers who have been affected by the company’s alleged fraudulent activities. Borrowers who have been misinformed about their loan terms, foreclosed on without permission, or charged unauthorized fees may be eligible for relief, including:
- Loan modifications: Borrowers may be eligible for loan modifications that reduce their monthly payments and interest rates.
- Refunds: Borrowers may be eligible for refunds of unauthorized fees and interest charges.
- Reinstatement of loan benefits: Borrowers may be eligible to have their loan benefits reinstated, including their right to occupy their homes.
Timeline of Events
The investigation into Carrington Mortgage began in 2020, and the company has been working to resolve the allegations made against it. Here is a timeline of key events:
- 2020: The FHA and CFPB launch investigations into Carrington Mortgage’s handling of FHA-insured loans and alleged violations of consumer protection laws.
- 2021: Several state attorneys general launch investigations into Carrington Mortgage’s activities, including allegations of fraud and deceptive business practices.
- 2022: The company agrees to settle the allegations made against it and pays a fine of $1.5 million to the CFPB.
- 2023: The FHA and state attorneys general continue to investigate Carrington Mortgage’s activities and negotiate settlements with the company.
Conclusion
The investigation into Carrington Mortgage is a significant development in the mortgage industry, highlighting the need for increased regulation and oversight of mortgage servicers and loan originators. Borrowers who have been affected by the company’s alleged fraudulent activities may be eligible for relief, including loan modifications, refunds, and reinstatement of loan benefits. As the investigation continues, it’s essential for borrowers to remain vigilant and seek legal advice if they have been affected by Carrington Mortgage’s activities.
Table: Allegations Made Against Carrington Mortgage
| Allegation | Description |
|---|---|
| Misrepresenting loan terms | Misrepresenting the terms of loan modifications to borrowers |
| Foreclosing on homes without permission | Foreclosing on homes without obtaining the necessary permission from borrowers |
| Charging unauthorized fees | Charging borrowers unauthorized fees, including late fees, interest charges, and other penalties |
| Failing to honor loan modifications | Failing to honor loan modifications agreed upon with borrowers |
Bullets: Key Points
• Carrington Mortgage is under investigation by regulatory bodies, including the FHA, CFPB, and state attorneys general.
• The company is accused of engaging in fraudulent activities, violating consumer protection laws, and mishandling loan modifications.
• Borrowers who have been affected by the company’s alleged fraudulent activities may be eligible for relief, including loan modifications, refunds, and reinstatement of loan benefits.
• The investigation began in 2020 and is ongoing, with the company agreeing to settle the allegations made against it in 2022.
• The company has paid a fine of $1.5 million to the CFPB and is negotiating settlements with the FHA and state attorneys general.
