Caliber Home Loans Slapped By New York AG! Servicer To Give Homeowners $17 Million In Loan Forgiveness
Finally! Caliber Home Loans slapped by the New York AG after pulling a loan modification scam. New York AG Letitia James announced that Caliber Home Loans is providing up to $17 million in mortgage loan forgiveness to its current customers in New York.
This settlement is for Caliber customers who were placed into interest-only loan modifications by the company. The settlement will also benefit customers who continue to deal with economic repercussions from COVID-19.
The New York Attorney General alleged that Caliber prioritized interest-only and short-term modifications that reverted to much higher payments after a period of up to five years. Thus, creating a risk of redefault for the homeowners.
Caliber will be providing a modification by reducing interest rates to 3.75% for the life of the loan. They will also extend the term up to 40 years or defer some principal to the end of the mortgage.
James also said of the statement:
Caliber services thousands of mortgages held by Lone Star Funds. Lone Star purchased these loans at a discount from multiple GSEs. This includes Fannie Mae, Freddie Mac, and HUD.
Caliber has changed the modification offer letters sent to homeowners. The new letters include terms that are clear and understandable. The settlement also requires Caliber to provide a list of NYS housing counselors and legal service providers to homeowners seeking modifications.