Friday, September 19, 2014

RCS Fails to Respond to NCCOB

Residential Credit Solutions Fails to Respond to North Carolina Commissioner of Banks

As an attorney who represents many homeowners facing foreclosure, part of my job entails helping clients obtain a loan modification while at the same time finding ways to prevent the lenders from successfully completing a foreclosure sale. Of course there are rules and federal guidelines that in theory are supposed to force a servicer to halt any foreclosure proceedings while a loss mitigation request is pending, but needless to say that doesn’t always work.

Recently, we were involved in a case with Residential Credit Solutions (RCS) as the servicer of a client’s mortgage loan. This post will summarize RCS’ inexcusable conduct towards the state and federal agencies, N.C. Commissioner of Banks (NCCOB) and Consumer Financial Protection Bureau (CFPB). For those of you that don’t know, the NCCOB is the state agency that charters, regulates, and licenses various financial institutions operating in North Carolina. Its mission is “to promote and maintain the strength and fairness of the North Carolina financial services marketplace through the supervision and regulation of financial service providers in that marketplace.”

It is not uncommon for us to have to file a comHouse Keys, Stack of Money and Foreclosure Notice - Cash for Keys Program.plaint with the NCCOB and CFPB when a loan servicer fails to act in compliance with the rules and guidelines. Most of the time, the servicers will respond to the complaints and try to correct the previous errors. However that was far from the case here.

We filed complaints regarding RCS’ actions, including but not limited to, RCS creating a fake sale date, violating the cease and desist by contacting our clients, and refusing to review our client’s request for loss mitigation due to incorrect information in its system (see an earlier post for the full story).

In response to the complaints, RCS sent a letter with false and misleading statements regarding our claims to the NCCOB and CFPB, but most importantly provided the non-existent foreclosure sale date as the basis for its actions. RCS’s response also alleged no loss mitigation request had been filed, which directly contradicted previous written and verbal communications from RCS itself acknowledging receipt of the request.

We disputed RCS’ erroneous response and the NCCOB sent a letter to RCS requiring a response to our dispute with an explanation of the non-existent foreclosure sale date. RCS ignored the NCCOB and did not respond to this second phase of investigation.

Next, the NCCOB sent a follow up letter to RCS acknowledging its failure to respond to the dispute in violation of the NC SAFE Act. When RCS finally did respond (a day after the required deadline), the response was filled with multiple errors referencing past inexistent foreclosure sale dates and failures to provide information that we had in fact provided to RCS multiple times.

To no surprise the pattern endures, we continue to point out RCS’ errors and misleading information while RCS repeatedly provides the wrong information. The most recent violation by RCS was telling the NCCOB that the foreclosure hearing had been canceled and was not rescheduled, but yet, we received a copy of a Notice rescheduling the foreclosure hearing.