CFPB nails BSI Financial Services for numerous violations

by Ryan Smith31 May 2019

The Consumer Financial Protection Bureau has slapped a Texas-headquartered mortgage servicer with more than $200,000 in penalties for numerous servicing violations.

BSI Financial Services handled mortgage servicing transfers with incomplete information and failed to adequately maintain current information on the loans it serviced, the agency said.

Under the terms of a settlement with the agency, BSI must pay a fine of $200,000 and pay at lease $36,500 in restitution for violations of the Consumer Financial Protection Act, the Real Estate Settlement Procedures Act, and the Truth in Lending Act.

According to the CFPB, BSI committed numerous mortgage servicing violations, including:

  • Handling mortgage servicing transfers with incomplete or inaccurate loss-mitigation information. This caused the company to fail to recognize transferred mortgages with pending loss-mitigation applications, in-process loan modifications and permanent loan modifications
  • Handling mortgage servicing transfers with incomplete or inaccurate escrow information, resulting in late escrow disbursements
  • Inadequately overseeing service providers, resulting in late escrow disbursements to pay borrowers’ property taxes and homeowners’ insurance premiums
  • Failure to promptly enter interest-rate adjustment data for adjustable-rate mortgages into its servicing system. This resulted in the company sending monthly statements to borrowers seeking to collect inaccurate principal and interest payments
  • Failure to maintain an adequate document-management system, which prevented BSI employees or customers from easily obtaining accurate information about mortgages.

In addition to the monetary penalty, BSI must establish a comprehensive data-integrity program to ensure the accuracy and completeness of data for the loans it services, the CFPB said. The company must also implement an information technology plan to ensure that its systems are appropriate for the size and scope of its operations.