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Attorney General Andrea Campbell announced her office reached a $2 million settlement with Texas-based residential mortgage loan servicer Cypress Loan Servicing
Formerly known as Rushmore Loan Management Services, Campbell’s office accused the company of violating Massachusetts’ consumer protection, foreclosure prevention, and debt collection laws.
“When mortgage loan servicers like Cypress violate our critical consumer protection and foreclosure prevention laws, they aren’t just breaking the rules – they are causing real pain and instability for Massachusetts residents and families,” Campbell said in a statement. “I am proud to announce this settlement, which will help ensure compliance with meaningful consumer protections and put mortgage servicers on notice that Massachusetts will not tolerate unlawful practices that put profit over people.”
The attorney general’s office alleged that Cypress engaged in significant violations of the Massachusetts foreclosure-prevention law, known as Section 35B. Campbell’s office alleged that Cypress unlawfully required consumers to pay large upfront down payments as a threshold requirement to enter into an otherwise affordable loan modification, which left consumers who could not afford these down payments unable to access the modification.
Additionally, the attorney general’s office alleged that Cypress made unlawful debt collection calls to consumers in thousands of instances that were in excess of the state’s legal limit of two debt collection calls per week, a violation of Massachusetts’ debt collection regulations. The office also alleged that the company failed to send consumers timely debt validation notices within five days of initially communicating a debt collection to consumers, as legally required.
Cypress has since sold its entire mortgage loan portfolio and rebranded as a master loan servicer, but retains the ability to subcontract direct loan servicers and to resume operating as a direct mortgage servicer in the future.
As part of the settlement, Cypress will assume responsibility for monitoring subservicers it may contract with and taking action as needed to ensure compliance with Massachusetts law. Additionally, in the event the company resumes direct servicing, Cypress will implement detailed business practice changes targeting past noncompliance and ensuring compliant operations in the future.
