Green Tree Servicing Settles with Vermont Attorney General Over Debt Collection Practices

Green Tree Servicing, LLC, a national servicer of residential mortgage loans, will pay Vermont consumers a total of $55,250 for the company’s debt collection practices and late payment of property taxes. Green Tree will also pay $176,750 to the State.

According to Attorney General William Sorrell, the settlement is the first in Vermont to focus on mortgage-related issues since a series of multistate and federal settlements with national banks and servicers. “We must ensure that home mortgages, which are so central to the financial well-being of Vermonters, are serviced in accordance with the law,” he said.

In servicing mortgage loans in Vermont, Green Tree routinely engages in debt collection activity and pays borrowers’ local property taxes out of escrow funds provided by the borrowers. Vermont law prohibits debt collection calls after 9:00 p.m., calls to debtors at their place of work contrary to their instructions, and calls to third parties that indicate that a debt is owed. However, the Attorney General’s Office found evidence that since 2011, Green Tree violated those prohibitions at least 26 times.

The Attorney General also considers the late payment of escrowed property taxes to be an unfair trade practice. Nonetheless, Green Tree paid property taxes more than 30 days after the tax due date on the accounts of 48 Vermont consumers, including a number of payments made more than 100 days late. Green Tree alleges that it ultimately corrected those errors and that none of the homeowners had to pay late fees or penalties.

The settlement requires that Green Tree pay $1,000 to each Vermont consumer whose property taxes the company paid more than 30 days late; $1,000 to each consumer contacted at her work place after being instructed not to do so, or with respect to whom calls were made to third parties; $500 to each consumer contacted after 9:00 p.m.; and $250 to each consumer contacted before 9:00 p.m., but whose call continued past 9:00 p.m. As a condition of receiving these payments, consumers will be required to release Green Tree from any further liability arising out of the facts described in the settlement.