FAIRBANKS CAPITAL CORP./SELECT PORTFOLIO SERVICING
Settlement in 2003 resulted in $40 million for consumers harmed by illegal loan servicing practices
Fairbanks Capital Corp. paid $40 million to resolve FTC and HUD charges that it engaged in widespread loan servicing abuses. The settlement provided refunds to consumers whose loans were serviced by Fairbanks between January 1, 1999 and December 10, 2003. The deadline to submit claims was April 24, 2004. We mailed redress checks to borrowers who submitted timely claim forms at the end of July, 2004.
Fairbanks changed its name to Select Portfolio Servicing, Inc., in July 2004.
In August 2007, the Federal Trade Commission reached an agreement with SPS to modify certain terms of the 2003 court settlement. The modified settlement will provide substantial benefits to consumers beyond those in the original settlement, including account adjustments and reimbursements or refunds of fees paid in certain circumstances. The FTC conducted a review of Select Portfolio Servicing’s compliance with certain aspects of the 2003 settlement. The FTC and Select Portfolio Servicing negotiated and agreed to several modifications of the settlement. HUD has also agreed to these changes. The modifications include:
- A five-year prohibition on marketing optional products, which are products or services that are not required by the consumer’s loan (such as home warranties).
- Refunds of optional products fees paid by consumers in certain circumstances. Consumers who are entitled to refunds will be or have been contacted by the company.
- Revision of the settlement’s limitations on charging attorney fees in a foreclosure or bankruptcy to ensure that consumers receive full disclosures, including the actual amount due if they receive an estimated fee. In addition, Select Portfolio Servicing will conduct reconciliations after payoff or foreclosure and reimburse any consumers who may have paid for services that were not actually performed.
- Refunds for consumers who may have paid foreclosure attorney fees for services that were not actually performed since November 2003. Consumers who are entitled to refunds will be contacted by the company.
- A permanent requirement that consumers be provided with monthly mortgage statements containing important information about their loans.
- A requirement that Select Portfolio Servicing revise its monthly mortgage statements based on consumer testing performed by a qualified, independent third party (which the company has already done).
- A requirement that Select Portfolio Servicing continue to use a qualified, independent third party to perform annual audits of its compliance with key settlement provisions until 2013. The results of these audits will be subject to review by the FTC.
- Revision of specific provisions to permit Select Portfolio Servicing to engage in certain practices that were prohibited by the original settlement. For example, the modified settlement allows the company to hold or reject a payment that is more than $25 short of the consumer’s monthly principal and interest payment so long as the consumer receives prompt notice of the action. The settlement continues to prohibit the company from applying such payments to fees before principal and interest.
|News Release (08/02/07)||[TEXT]|
|Modified FTC Consent Order||[PDF]|
|Final Approval Order (05/13/04)||[PDF]|
|Preliminary Class Action Approval Order (12/10/03)||[PDF]|
|Notice of Proposed Class Action Settlement(12/10/03)||[PDF]|
|FTC Consent Order(11/21/03)||-||[PDF]|
|Stipulated Final Judgment and Order as to Basmajian (11/21/03)||-||[PDF]|
|News Release (11/12/03)||[TEXT]||-|
|Nationwide Class Action Settlement Agreement (11/14/03)||[PDF]|
|List of FTC subprime lending cases since 1998||[TEXT]||-|
A mortgage loan servicer is responsible for collecting your monthly loan payments and crediting your account. The servicer also handles your escrow account, if you have one. It’s important to make sure that your mortgage account is properly credited for each payment you submit.
The brochure below, “Mortgage Servicing: Making Sure Your Payments Count,” offers information about what a mortgage servicer does and what your rights are. The FTC also offers publications to help you make a wise decision if you’re obtaining a mortgage to purchase a home or if you’re refinancing your current mortgage.
|Mortgage Servicing: Making Sure Your Payments Count||[TEXT]||[PDF]|
|Mortgage Payments Sending You Reeling? Here’s What to Do||[TEXT]||[PDF]|
|Your Access to Free Credit Reports||[TEXT]||[PDF]|
|Home Equity Loans: The Three-Day Cancellation Rule||[TEXT]||[PDF]|
|Looking for the Best Mortgage?||[TEXT]||[PDF]|
|Need a Loan? Think Twice About Using Your Home as Collateral||[TEXT]||[PDF]|
|Shopping for a Home Equity Loan?||[TEXT]||[PDF]|
|Home Equity Credit Lines||[TEXT]||[PDF]|
If you'd like to speak to a local housing counselor, you may contact the Housing and Urban Development's toll-free hotline at 1-800-569-4287 for a list of counselors in your area.
Cómo Estar Seguro de que sus Pagos se
Mortgage Servicing: Making Sure Your Payments Count
la Hipoteca Más Favorable?
Looking for the Best Mortgage?
|¿Necesita un Préstamo?
Piénselo Dos Veces Antes de Utilizar
su Casa como Colateral
Need a Loan? Think Twice About Using Your Home as Collateral