In the News
Correction:Due to an editing error, a previous version of this story incorrectly stated the relationship between LoanCare, Black Knight Financial Services and Fidelity National Financial. LoanCare is a mortgage servicing subsidiary of ServiceLink. ServiceLink is a majority-owned subsidiary of Fidelity National Financial. Black Knight Financial Services is also a majority-owned subsidiary of Fidelity National Financial, but is otherwise unaffiliated with ServiceLink and LoanCare.
WASHINGTON The Consumer Financial Protection Bureau is charging two companies affiliated with Western Union and Fidelity National Financial more than $38 million in total charges for allegedly steering consumers into a mortgage payment program that cost them millions of dollars in fees.
Paymap Inc., a payment processor that is part of Western Union, and LoanCare, a mortgage servicer that serves as a subservicer for ServiceLink (which is majority-controlled by Fidelity National Financial), were cited by the CFPB for wrongfully promising "tens of thousands of dollars in interest savings" to consumers if they made more frequent mortgage payments. The "Equity Accelerator Program" deducted automatic payments for a mortgage on behalf of the consumer, but also typically charged a $295 enrollment fee as well as a $2.50 transaction fee for each debited payment. As a result, about 125,000 consumers paid more than $33 million in fees since July 2011, the CFPB said.
Colorado-based Paymap has agreed to return $33.4 million in fees to affected consumers and pay a $5 million civil penalty, while LoanCare in Virginia has agreed to pay a $100,000 penalty. Both companies have agreed to the order without confirming or denying the allegations.
"Deceptive advertising has no place in the financial marketplace," said CFPB Director Richard Cordray in a press release. "Today's action is delivering relief for consumers deceived by Paymap and LoanCare, and sending a clear message that these practices will not be tolerated."
LoanCare is actually one of "many mortgage servicers" that partnered with Paymap to market the Equity Accelerator program, the CFPB said. Paymap's fees charged to consumers were then shared with LoanCare.
While there are many companies that offer borrowers the option to lower their interest rate costs by making biweekly, or more frequent mortgage payments, the CFPB said the named companies did not actually make those mortgage payments. Instead, it held