On March 1, 2021, a Assurance of the setting (AOD) came into effect between the New York attorney general and a national mortgage servicing company after the company’s reverse mortgage servicing department had provided misleading communications to borrowers.
The notices described in the AOD include pre-foreclosure notices sent to borrowers whose reverse mortgage was in default or who had been expedited and which allegedly contained language related to a subpoena and complaint related to the borrowers suggests that a foreclosure lawsuit had not been filed by that time. The AOD also refers to the service provider paying property taxes without properly notifying borrowers, resulting in duplicate tax payments.
The terms of the AOD prohibit the servicer from further violating New York borrowers and require the servicer to take certain steps to ensure compliance when sending future tax payments and advance foreclosure notices. Additionally, the AOD requires the servicer to designate an escalation contact that nonprofit housing counselors and other entities can contact regarding borrower defaults and mitigation options, and pay $ 500,000 in relief for the state’s Equitable Reverse Mortgage Assistance Program.