Feds announce Green Tree Servicing to pay $63M to settle loan, debt collection allegations

Associated Press

The federal government says Green Tree Servicing LLC will pay $63 million to settle allegations of illegal loan servicing and debt collection practices.

The Federal Trade Commission and the Consumer Financial Protection Bureau alleged the St. Paul-based company made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed and failed to honor loan modification agreements between consumers and their previous servicers.

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Under the proposed settlement announced Tuesday, Green Tree will pay $48 million to affected customers and a $15 million civil penalty. The company also will stop the alleged practices and create a home preservation plan for some distressed homeowners.

Green Tree does not admit or deny the allegations. The company is a wholly owned subsidiary of Walter Investment Management Corp., based in Tampa, Florida.