Green Tree fails key compliance tests

Miss the mark on several key Office of Mortgage Settlement Oversight metrics

Mortgage services Green Tree has failed to meet one-quarter of compliance tests dating back to the fourth quarter of 2013, in metrics that assesses how it treats struggling borrowers. Green Tree, which is a subsidiary of Walter Investment Management Corp, had acquired mortgage servicing rights from a unit of Ally Financial Inc.. Green Tree’s involvement in the testing pre-dates their association with Ally, as Ally had entered a joint states-federal settlement that subjected it to the tests.

The company failed eight of 29 tests to determine how it is complying with the servicing standards, according to a report released by the Office of Mortgage Settlement Oversight. According to the Chicago Tribune, the failed tests included proving that loans were delinquent when foreclosure proceedings were begun against borrowers, whether borrowers received proper, timely and accurate information about their loans, errors mistakes made in papers filed with bankruptcy court and whether the company responded to customer complaints within specific time frames.

According to the report from the monitor, Green Tree failed the following servicing metrics:

  • Metric 4, which tests whether the servicer accurately stated amounts due from borrowers in proofs of claims filed in bankruptcy proceedings
  • Metric 5, which tests whether the servicer accurately stated amounts due from borrowers in affidavits filed in support for relief from stay in bankruptcy proceedings
  • Metric 6, which tests whether loans were delinquent at the time foreclosure was initiated and whether the servicer provided borrower with accurate information in a pre-foreclosure letter
  • Metric 7, which tests whether the servicer provided borrower with required notifications no later than 14 days prior to referral to foreclosure and whether required notification statements were accurate
  • Metric 10, which tests whether the servicer waived post-petition fees, charges or expenses when required by the Settlement
  • Metric 12, which tests whether the servicer has documented policies and procedures in place to oversee third party vendors
  • Metric 18, which tests whether the servicer responded to government submitted complaints and inquiries from borrowers within 10 business days and provided an update within 30 days
  • Metric 19, which tests whether the servicer notified the borrower of any missing documents in a loan modification application within five days of receipt

“My colleagues and I conducted a rigorous testing process to review five servicers’ compliance with the National Mortgage Settlement’s original 29 metrics for the third and fourth quarters of 2013,” said Joseph Smith who was the monitor overseeing the tests. “I’m pleased to report that these servicers passed all tests during this reporting period.

“In addition, this report contains the results from the first quarter Green Tree was tested for the loans it acquired from the ResCap Parties. After extensive testing, I can confirm that Green Tree failed eight metrics. These results show that Green Tree must make significant changes to improve its practices and comply with the Settlement

Five others banks were subject to the compliance metrics and they included, Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo – they all passed the  tests in the second half of 2013, according Smith.

Meantime, Green Tree says it’s working towards resolving the issues that led to the borrower to fail to meet the standards."We are dedicated to addressing these issues in a timely manner and are confident that the implementation of our corrective action plans will result in a positive outcome during our next review cycle," Walter Investment Chairman and Chief Executive Officer Mark J. O'Brien said in a statement to the Tampa Business Journal. 

Contributing Author

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Alexis Harrison

Alexis Harrison is a Connecticut-based writer and public relations professional whose career spans both print journalism and broadcast news. Alexis started her professional life as...

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