Inspite of Fairbanks Capital settlement with the FTC and HUD, it appears like they are still up to the same old TRICKS. Consumers are still complaining about their business practices.

http://www.spservicing.com/

Has anyone heard anything about the readdress from this lying company? I'm sure the money is sitting somewhere in Switzerland making them more money.

What is up with the ftc and the lawyers who handled this case. Haven't heard nor seen a thing since the may hearing which sounds like it was over back in nov. But why should we be told the truth. It's not in their handbook of how to treat customers. We aren't customers only dollar signs.

Robin
New Lenox, Illinois
U.S.A.

http://www.ripoffreport.com/reports/ripoff100004.htm

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For Release: November 12, 2003

Fairbanks Capital Settles FTC and HUD Charges

Agencies Allege Fairbanks Engaged in Illegal Practices in Servicing Subprime Loans; Defendants Will Pay Over $40 Million for Consumer Refunds

The Federal Trade Commission today announced settlements with Fairbanks Capital Holding Corp., its wholly-owned subsidiary Fairbanks Capital Corp., and their founder and former CEO, Thomas D. Basmajian (collectively, Fairbanks). In separate settlements, the corporate defendants will pay $40 million in redress to consumers, and defendant Basmajian will pay $400,000 in redress. In a complaint filed in federal district court, the FTC charges Fairbanks with engaging in a variety of unfair, deceptive, and illegal practices in the servicing of subprime mortgage loans. According to the FTC, the defendants, among other things, failed to post consumers’ mortgage payments in a timely manner and charged consumers illegal late fees and other unauthorized fees. The settlements are contingent on approval by a federal district court in Massachusetts, and the settlement with the corporate defendants will be coordinated with a related settlement in a class action lawsuit. The case was jointly filed with the U. S. Department of Housing and Urban Development (HUD).

“Consumers should be treated fairly and honestly in the servicing of their loans,” said Timothy J. Muris, Chairman of the FTC. “It is particularly important that the Commission stop unfair or deceptive practices in this industry, because consumers have no choice about who services their home loans – and it can be extremely difficult for subprime borrowers to avoid an abusive servicer by refinancing or paying off their loans.”

HUD Secretary Mel Martinez said, “Today’s settlement makes clear that HUD and FTC are serious about protecting consumers from those who would try to steal their American Dream.

The message we are sending is clear – those who seek to take advantage of unsuspecting homeowners will be tracked down and held accountable.”

Subprime lending refers to the extension of credit to persons who are considered to be higher risk borrowers. Fairbanks is a financial services company specializing in the servicing and resolution of subprime mortgage loans. Fairbanks does not originate loans, but collects and processes loan payments from borrowers on behalf of the owner of the mortgage notes. Headquartered in Salt Lake City, Utah, Fairbanks is one of the country’s largest servicers of subprime mortgage loans. The FTC alleges that Fairbanks engaged in a myriad of unfair, deceptive, and illegal practices in collecting and processing consumers’ loan payments.

ALLEGED LAW VIOLATIONS

The complaint charges Fairbanks with violating several federal laws, including the FTC Act, the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and the Real Estate Settlement Procedures Act (RESPA) enforced by HUD.

FTC Act Violations

The FTC alleges that, in servicing loans, Fairbanks frequently:

* failed to post consumers’ mortgage payments in a timely and proper manner, and then charged consumers late fees or additional interest for failing to make their payments “on time”;

* charged consumers for placing casualty insurance on their loans when insurance was already in place;

* assessed and collected improper or unwarranted fees, such as late fees, delinquency fees, attorneys’ fees, and other fees; and

* misrepresented the amounts consumers owed.

Fair Debt Collection Practices Act

The complaint also alleges that Fairbanks violated several provisions of the FDCPA, in connection with collecting loans that were in default when Fairbanks obtained them. Specifically, the FTC alleges that the defendants falsely represented the character, amount, or legal status of consumers’ debts; communicated or threatened to communicate credit information which was known or which should have been known to be false, including the failure to communicate that a debt was disputed; used false representations or deceptive means to collect or attempt to collect a debt, or to obtain information concerning a consumer; collected amounts not authorized by the agreement or permitted by law; and failed to validate debts.

Fair Credit Reporting Act

The FTC alleges that the defendants furnished information about consumers’ payment status to consumer reporting agencies when they knew or consciously avoided knowing that the information was inaccurate. Also, when consumers informed the defendants that they disputed the reported information, the defendants did not report the dispute to the consumer reporting agencies.

Real Estate Settlement Procedures Act

RESPA is a federal statute that requires loan servicers to respond to borrowers’ written requests about their loans and to make timely insurance and property tax payments on behalf of borrowers and otherwise properly administer their escrow accounts. In the complaint, HUD alleges that the defendants failed to timely and adequately acknowledge, investigate, and respond to borrowers’ written requests for information about the servicing of their loans and escrow accounts. HUD also alleges that the defendants failed to make timely payments of escrow funds for insurance premiums and property taxes.

THE SETTLEMENTS

The settlements announced today resolve the Commission’s and HUD’s allegations. If approved, the settlements will require the Fairbanks corporations to pay $40 million, and Basmajian to pay $400,000, to the FTC to be used to compensate consumers who suffered harm from: (1) unauthorized late fees, (2) other fees Fairbanks imposed on consumers it deemed in default, (3) unauthorized prepayment penalties, or (4) other improper practices by Fairbanks related to consumer defaults.

The settlements also enjoin the defendants from future law violations and impose new restrictions on their business practices. The settlements:

* require the defendants to accept partial payments from most consumers and to apply most consumers’ mortgage payments first to interest and principal;

* prohibit the defendants from force placing insurance when they know the consumer has insurance or fail to take reasonable actions to determine whether the consumer has insurance;

* enjoin the defendants from charging unauthorized fees, and place limits on specific fees

* require the defendants to acknowledge, investigate, and resolve consumer disputes in a timely manner;

* require the defendants to provide timely billing information, including an itemization of fees charged;

* prohibit the defendants from taking any action toward foreclosure unless they have reviewed the consumer’s loan records to verify that the consumer failed to make three full monthly payments, confirmed that the consumer has not been the subject of any illegal practices, and investigated and resolved any consumer disputes;

* prohibit the defendants from piling on late fees in certain situations;

* prohibit the defendants from enforcing certain waiver provisions in forbearance agreements that consumers had to sign to prevent foreclosure; and

* prohibit the defendants from violating the FDCPA, the FCRA, and the RESPA.

Read the entire text at: http://www.ftc.gov/opa/2003/11/fairbanks.htm
http://www.clsphila.org/PDF%20folder...l-11-14-03.pdf

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