Carrington Mortgage Services, LLC
On November 17, 2022, the Bureau issued an order against Carrington Mortgage Services, LLC, a California-based mortgage servicer operating in all fifty states. Carrington services a large number of federally backed mortgage loans, which are made or guaranteed by federal agencies or government-sponsored entities (GSEs). In 2020, Congress passed the CARES Act, which provided borrowers with federally backed mortgage loans who were experiencing financial hardship during the COVID-19 emergency with certain assistance, including forbearances of up to 180-days each upon request and protections for credit reporting. The federal agencies and GSEs also issued guidelines to their servicers relating to assistance to borrowers during the pandemic. The Bureau found that Carrington failed to implement a number of those protections through misrepresentations to consumers, including by: representing that borrowers could not have 180 days of forbearance on request or that certain borrowers could not have forbearance at all; representing that consumers had to make more detailed attestations than were actually required by law; representing that late fees for amounts in forbearance would be charged when they were not permitted; and providing incorrect or confusing information about forbearance and repayment options. The Bureau also found that Carrington did not accurately report the status of borrowers on forbearance to consumer reporting agencies (CRAs), and failed to maintain and update its written policies and procedures relating to furnishing to CRAs in connection with the CARES Act. As a result, the Bureau determined that Carrington violated the Consumer Financial Protection Act of 2010’s (CFPA) prohibition on deceptive conduct, as well as certain provisions of the Fair Credit Reporting Act (FCRA) and its implementing regulation, Regulation V. The order requires Carrington to, among other things, conduct an audit to ensure any improperly charged late fees have been refunded to consumers, and if not, to refund them; to assess customer service staffing and provide training relating to applicable CARES Act and agency and GSE guidelines; to establish policies and procedures to prevent the issues from recurring; and to pay a civil money penalty of $5.25 million.