Texas Attorney General Greg Abbott has charged American Home Mortgage Servicing Inc. (AHMS) with using illegal debt collection tactics and improperly misleading homeowners facing foreclosure .
According to state investigators, AHMS collections agents used aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations. The defendant also failed to credit homeowners who properly submitted their payments on time. In other cases, AHMS agents falsely claimed that homeowners did not make payments so the agents could justify profitable late fees or escrow accounts. The defendant also failed to properly credit homeowners after AHMS agents withdrew funds from the homeowners’ checking accounts. Because of the defendant’s unlawful conduct, homeowners defaulted on their loans, leading to foreclosure proceedings.
Not only that, AHMS is accused of falsely claiming to have a “Home Retention Team” to help homeowners avoid foreclosure; but many homeowners found that their “help” actually worsened their situation. For example, some homeowners placed in loan modifications found that their monthly payments increased instead of decreasing. This recent charge of exploiting homeowners facing foreclosure is juts the most recent and most glaring example of how some mortgage companies and their agents are using the foreclosure crisis to enrich their companies. This is what happens when legislators charged with overseeing the business practices of the mortgage industry fail to implement harsh punishments for those who exploit homeowners. Many of these homeowners who lost their homes to foreclosure because of this company’s alleged conduct will be affected by their losses for years to come. It is not easy for most people to purchase a home and then to have it lost to foreclosure can be financially and emotionally devastating. And while the Texas Attorney General is seeking $20,000 for each violation allegedly committed by this company, how much of that (if any) will go to help these homeowners to get back on their feet? And will it be enough?