Bear to pay $28M to settle loan grievance
The Bear Stearns Cos. Inc. and its subsidiary, EMC Mortgage Corp., have agreed to pay $28 million to settle Federal Trade Commission charges that they engaged in unlawful practices in servicing consumers’ home mortgage loans.
The Bear Stearns Cos. Inc. and its subsidiary, EMC Mortgage Corp., have agreed to pay $28 million to settle Federal Trade Commission charges that they engaged in unlawful practices in servicing consumers’ home mortgage loans.
The FTC charged that New York-based Bear Stearns and Irving, Texas-based EMC Mortgage misrepresented the amounts borrowers owed, forced the consumers to pay unauthorized expenses, such as late fees for property inspection and loan modification, and engaged in unlawful and abusive collection practices.
Under the settlement, Bear Stearns and EMC will halt the practices and institute a data integrity program to ensure the accuracy and completeness of consumers’ loan information.
The two firms are also required to pay $28 million to consumers injured by the illegal practices.
“Like other companies that send a bill, mortgage servicers must make sure that the amount they say is due really is the amount due,” Lydia B. Parnes, director of the Washington-based FTC’s Bureau of Consumer Protection, said in a statement.
Bear Stearns was bought earlier this year by New York-based JPMorgan Chase & Co. for a fire-sale price of $2.2 billion, or $10 a share, after the Wall Street firm nearly collapsed from the credit crunch (InvestmentNews May 29).
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