Financial Services Law Developments: FYI: IL Regulator Fines Mortgage Servicer $290k for Improper Foreclosure Affidavit Practices

Tuesday, August 9, 2011

FYI: IL Regulator Fines Mortgage Servicer $290k for Improper Foreclosure Affidavit Practices

The Illinois Department of Financial and Professional Regulation (IDFPR)
recently fined a mortgage servicer $290,000 for alleged improper
foreclosure affidavit practices.

A copy of the Order Assessing Fine is available at:
http://www.idfpr.com/NEWSRLS/2011/PHHOrder06232011.pdf

The IDFPR fined PHH Mortgage Corporation (PHH) $290,000 for signing
foreclosure affidavits that the company allegedly knew would later be
altered by its attorneys, and for allegedly submitting affidavits signed
by a person other than the affiant. The violations were found during an
ongoing special investigation of 20 Illinois licensed mortgage servicing
companies.

Specifically, the IDFPR alleged that in at least 19 files, PHH failed to
re-execute affidavits after they had been altered by the company's
foreclosure attorneys. The IDFPR alleged that PHH knew of and conspired
with this alleged misconduct because the original affidavits were
allegedly incomplete and contained notations such as "will add" when they
were tendered to the law firm of Fisher and Shapiro.

The IDFPR also alleged that 16 affidavits were represented as having all
been signed and attested to by the same PHH employee in his or her
official capacity, but allegedly no less than five distinctly different
signatures were attributed to this same PHH employee.

The IDFPR also alleged that, although PHH had a written policy regarding
the execution of foreclosure affidavits, PHH allegedly failed to ensure
that its employees complied with this written policy and allegedly failed
to conduct necessary internal and external quality control reviews.

Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
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Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: RWutscher@mtwllp.com

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The Editor's Bio

Ralph T. Wutscher
Maurice Wutscher LLP
20 N. Clark Street, 33rd Floor
Chicago, Illinois 60602
Direct: (312) 493-0874
RWutscher@MauriceWutscher.com
https://www.MauriceWutscher.com/

Ralph Wutscher's practice focuses primarily on representing depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, distressed asset buyers and sellers, loss mitigation companies, automobile and other personal property secured lenders and finance companies, credit card and other unsecured lenders, and other consumer financial services providers. He represents the consumer lending industry as a litigator, and as regulatory compliance counsel.

Ralph has substantial experience in defending private consumer finance lawsuits, including cases ranging from large interstate putative class actions to localized single-asset cases, as well as in responding to regulatory investigations and other governmental proceedings. His litigation successes include not only victories at the trial court level, but also on appeal, and in various jurisdictions. He has successfully defended numerous putative class actions asserting violations of a wide range of federal and state consumer protection statutes. He is frequently consulted to assist other law firms in developing or improving litigation strategies in cases filed around the country.

Ralph also has substantial experience in counseling clients regarding their compliance with federal laws, and with state and local laws primarily of the Midwestern United States. For example, he regularly provides assistance in connection with portfolio or program audits, consumer lending disclosure issues, the design and implementation of marketing and advertising campaigns, licensing and reporting issues, compliance with usury laws and other limitations on pricing, compliance with state and local “predatory lending” laws, drafting or obtaining opinion letters on a single- or multi-state basis, interstate branching and loan production office licensing, evaluations and modifications of new or existing products and procedures, debt collection and servicing practices, proper methods of responding to consumer inquiries and furnishing consumer information, as well as proposed or existing arrangements with settlement service providers and other vendors, and the implementation of procedural or other operational changes following developments in the law.

Ralph is a member of the Governing Committee of the Conference on Consumer Finance Law. He is also the immediate past Chair of the Preemption and Federalism Subcommittee for the ABA's Consumer Financial Services Committee. He served on the Law Committee for the former National Home Equity Mortgage Association, and completed two terms as Co-Chair of the Consumer Credit Committee of the Chicago Bar Association.

Ralph received his Juris Doctor from the University of Illinois College of Law, and his undergraduate degree from the University of California at Los Angeles (UCLA). He is a member of the national Mortgage Bankers Association, the American Bankers Association, the Conference on Consumer Finance Law, DBA International, the ACA International Members Attorney Program, as well as the American and Chicago Bar Associations.

Ralph is admitted to practice in Illinois, as well as in the United States Court of Appeals for the Seventh Circuit, the United States District Courts for the Northern and Southern Districts of Illinois, and the United States District Court for the Eastern District of Wisconsin, and has been admitted pro hac vice in various jurisdictions around the country.