[Post updated October 2017] Cenlar FSB bills itself as the “nation’s leading loan serving provider.” Their website claims the company “earned a reputation for excellence and dedication to client service.” Unfortunately, their clients are big banks and mortgage trusts, not the tens of thousands of homeowners who rely on them for loan serving.
We are investigating the claims of one of our clients, a homeowner that says Cenlar routinely violates HUD’s loan servicing and loss mitigation guidelines.
HUD recognizes that communities are still experiencing high rates of foreclosure, as well as an increase in the number of homeowners at risk of foreclosure. Each foreclosure event represents a potentially devastating impact on the homeowners that lose their homes, on the neighborhoods that experience a growing accumulation of vacant and abandoned housing and on the nation’s economic recovery, which is largely dependent upon the stability of the housing market.
For nonlawyers and bankers, loss mitigation refers to a panoply of regulations and government programs designed to keep people in their homes. Before a lender or servicer can foreclose an FHA mortgage, special steps must first be taken.
Since the government backs all FHA mortgages, HUD requires mortgage servicers, including Cenlar, to first determine whether there are foreclosure alternatives such as mortgage modifications or one-time variances. Servicers are also supposed to have face-to-face meetings with borrowers in order to better help struggling homeowners.
We believe Cenlar routinely violates HUD’s loss mitigation guidelines.
Yesterday while driving I received a call from a woman in Ohio. Cenlar is her servicer. According to her, the company repeatedly dangled loan modification options before her, only to later take them away. She says the company accepted the required trial payments only to later say that paperwork was missing or that she didn’t qualify.
Her story caused me to look online. The reviews of Cenlar are horrendous. Pissed Consumer gives the company 1 out of 5 stars for customer service. (In fact, it rated only 1 star in every category.)
The most recent review on their site is from a homeowner whose loan was transferred to Cenlar for servicing. Remember, homeowners typically have no say in who services the loan. According to the homeowner, Cenlar had the loan for weeks but waited until two days before payment was due before notifying the homeowner. They then decided that flood insurance was needed on the property. The homeowner complied an purchased a policy but so did Cenlar and a premium 500% higher than what the homeowner paid.
Another homeowner recently said, “Cenlar looses every document we have emailed, faxed and mailed to them. They say ‘they have no record of receiving our docs.’ At yet they can take $100’s of dollars from us, for escrow we do not owe? Its nuts!And there is not way you can get them to listen or respond to the information you have sent to them.”
Consumeraffairs.com also gives Cenlar just 1 star. A homeowner on that site reported,
I too am wondering how in the world this company is still in business and how the employees can sleep at night! About 3 years ago we had to go through a modification on our loan. I did everything I was told and was quoted a figure for a new monthly payment. For the next FOUR MONTHS. I made my payment on time. Then in August I get a letter of foreclosure! I called and was told the payment I had made each month was too low and I was getting further and further behind each month. All four months not one time did anyone who took my let me know this! I found out the imbecile who did my modification was no longer employed there. Had been fired. I told them I was quoted a too low payment by this person but it didn’t matter.
It’s easy for homeowners to blame the customer service staff at Cenlar. We have represented many mortgage company customer service reps who have decided to become whistleblowers. They are often the scapegoats for situations completely beyond their control… Computer systems that don’t talk to one another, insane pressure from management to simply placate borrowers instead of fix problems and chronic understaffing. Management makes it impossible for customer service reps to modify loans.
Forced Place Insurance Scheme
TopClassAction.com reported last year that a class action had been filed on behalf of Florida homeowners. According to their site, a homeowner named Thomas M. purchased a second home in 2008, using Cenlar as the lender. At the time of his purchase he secured the necessary homeowners policy as required by the lender. Several years later Cenlar told him that he needed a second “wind insurance” policy. When he questioned the terms of the loan documents and insurances required, Cenlar “force placed” the insurance on the property and took $7,500 from Thomas M’s escrow money.
The Attorney General of New York and several other states have been investigating these forced place insurance programs. Frequently homeowners pay up to 10x what the insurance actually is worth. Some lenders and servicers were also found to be taking kickbacks from the insurance companies.
Most homeowners can’t afford to sue their lender. That is why we are looking for whistleblowers. If a company like Cenlar is violating HUD, FHA or FHFA servicing guidelines, huge whistleblower awards may be available.
Whistleblower Awards Available for Cenlar Employees
As one of the country’s leading whistleblower firms, we are interested in speaking with people who have worked at Cenlar or inside any of the larger mortgage servicers. Under the federal False Claims Act, whistleblowers that come forward with information about fraud against a government program are eligible to receive an award of up to 30% of whatever the government collects from the wrongdoer. Since most residential mortgages are backed by the FHA, Fannie Mae or Freddie Mac, violations of loan servicing rules may qualify.
To qualify for an award, special rules must be followed. Generally one must have inside, original source information and only the first person to come forward can collect an award.
Whistleblowers are the new American heroes. In 2014 the Justice Department gave $635 million to whistleblowers under the U.S. False Claims Act. Additional award monies may also be available through FIRREA, the Financial Institutions Reform, Recovery and Enforcement Act. Congress has stepped in too with strengthened whistleblower anti-retaliation provisions.
Have inside information about illegal foreclosure practices of Cenlar or other loan servicers? We would love to speak with you. For more information, contact attorney Brian Mahany at or by telephone at (direct). You can also visit our False Clains Act whistleblower award page.
MahanyLaw – America’s Whistleblower Lawyers