Massachusetts AG Andrea Campbell Secures $2 Million Settlement from Texas Based Cypress Loan Servicing For Alleged Consumer Protection Violations

Massachusetts Attorney General Andrea Joy Campbell has landed a notable victory in the realm of consumer protection, nailing down a $2 million settlement with a Lone Star State-based mortgage loan servicer. The company, Cypress Loan Servicing LLC – previously known as Rushmore Loan Management Services LLC – was under fire for allegedly violating state laws centered on consumer rights and foreclosure practices.

The agreement stipulates that, in addition to coughing up cash to the Commonwealth, Cypress must overhaul its way of doing business to align with Massachusetts regulations and keep the AG’s Office in the loop about its compliance strides. Reports from Mass.gov reveal that this payout will not only penalize the servicer but also put some funds back in the pockets of consumers who faced foreclosure.

In a statement obtained by Mass.gov, AG Campbell laid out the case against Cypress, stating: “When mortgage loan servicers like Cypress violate our critical consumer protection and foreclosure prevention laws, they aren’t just breaking the rules – they are causing real pain and instability for Massachusetts residents and families.” Her office had accused Cypress of demanding hefty down payments from borrowers seeking loan modifications, sans any affordability checks, which she contended pushed some homeowners unnecessarily toward foreclosures.

But the allegations didn’t stop with questionable loan mods. The AG’s Office added that Cypress also stepped over the line in its debt collection methods, ringing up consumers with calls exceeding the state’s maximum of two per week. And, if getting too many calls wasn’t bad enough, the company also apparently slacked off on sending out timely Debt Validation Notices, a step they’re required by law to take within five days of making contact about a debt. It’s the kind of detail that can spell a world of difference for folks struggling to keep their heads above fiscal waters.

The settlement inked with Cypress is all about making things right, or at least as right as they can get after the fact. Cypress, which has since flipped its business model from direct mortgage loan servicing to a more hands-off master servicing role, swears to keep a sharper eye on any subservicers it may employ and stick to a straighter and narrower path if it wades back into direct service waters.

It’s worth mentioning that this isn’t a one-off for AG Campbell. Her track record lays out a clear pattern of standing up for equal economic chances and consumer justice, including previous settlements and lawsuits in the housing sector. Worried Massachusetts residents who believe they’ve been on the receiving end of an unfair business shake-up by mortgage servicers, or other such dealings, can lodge a complaint with the AGO, as suggested by the official announcement. The AG’s Consumer Protection Division, helmed by Assistant Attorney General Mercy Cover and her team, will take it from there.