Mel Musto/Bloomberg
Rithm affiliate Newrez has entered into a settlement with Massachusetts Attorney General Joy Campbell that resolves allegations related to its status as a successor by merger to Specialized Loan Servicing.
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“This settlement resolves a several-years-old investigation concerning historical practices of a
Newrez will pay $4.65 million, part of which be earmarked for consumer restitution, to settle the allegations of noncompliance related to notifications required under the Bay State’s consumer protection and foreclosure prevention laws.
Allegations related to notifications and procedures included the following:
- sending letters to consumers stating that they must cure their defaulted loans in only 33 days, when the law allows for 90; and
- failing to take steps to avoid foreclosures, including by not notifying borrowers of their right to pursue
a loan modification or process requests for one.
“While this settlement cannot undo the pain of losing one’s home, it will deliver meaningful relief for impacted borrowers and ensure stronger protections to prevent future harm,” Campbell said in a press release.
The Specialized Loan Servicing portfolio included nearly 24,000 properties in Massachusetts, according to the AG’s press release.
In addition to making the payment, Newrez will take operational steps aimed at borrower protection and ensuring compliance. The mortgage company also has agreed to provide regular reports on its compliance to the AG’s office.
“We remain committed to helping customers achieve and maintain the dream of homeownership,” the company said in its statement. “Newrez cooperated at all times with the investigation and is pleased to put this matter behind us.”
