home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map

twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Servicing News | Servicer Ranking | Delinquency Statistics
Stories about mortgage servicers, delinquency and f o r e c l o s u r e s. Coverage of servicing lawsuits and loan servicing technology.

Servicing Problems Result in $40 Million Fairbanks Settlement

FTC, HUD will drop investigations

October 28, 2003


One of the nation's leading servicers of subprime mortgages, under intense regulatory pressure because of consumer complaints, has agreed to a $40 million settlement with the federal government.

Fairbanks Capital Corp. of Salt Lake City, Utah, has reached the agreement with the U.S. Department of Housing and Urban Development (HUD) and the Federal Trade Commission (FTC).

In return, the government agencies will drop their investigations of Fairbanks.

The settlement must still be approved by the federal investigations, which have been investigating Fairbanks for a number of allegations lodged by consumers.

Fairbanks has been accused of charging excess fees, misapplying mortgage payments and inappropriately threatening customers with foreclosures by using inaccurate or false information.

"We have acknowledged an investigation and we have worked extensively with (Fairbanks) to come to a resolution, but we have no comment at this time," Brenda Mack, spokeswoman with the FTC in Washington, said in an interview.

Fairbanks spokesman Brian Keeter referred MortgageDaily.com to statements and filings made by The PMI Group Inc., a New York Stock Exchange publicly-traded investment company and Fairbanks' majority shareholder.

In the statement, posted on the PMI Group's website, the company said "this proposed settlement must be approved by the FTC commissioners as well as HUD and its implementation is subject to obtaining necessary court approvals."

PMI Group offers more details in a recent filing with the Securities and Exchange Commission (SEC).

"If approved ...the agreement will resolve both the FTC and HUD civil investigations," PMI Group said in the filing. "The terms of the proposed settlement require changes in Fairbanks' operations and the creation of a $40 million fund for the benefit of consumers allegedly harmed by Fairbanks. PMI expects to guarantee or fund approximately two-thirds of Fairbanks' obligations under a $30 million letter of credit to be obtained by Fairbanks to fund a portion of the $40 million fund."

In the earnings statement PMI said the settlement will resulted in a loss of 20 cents a share. For the third quarter, Fairbanks announced net income of 67 cents a share, compared to 98 cents in the same quarter a year ago.

The federal investigations began in March after Sen. Barbara A. Mikulski, D-Md., asked HUD to "launch an investigation into the business practices of Fairbanks Capital Corp."

"There are hundreds of complaints about this company from homebuyers all over the country, alleging that Fairbanks is scamming them out of thousands of dollars," she wrote in a letter to HUD Inspector General Kenneth Donohue.

Despite being the focus of several unfavorable news stories Fairbanks has said little about the investigations or the charges and complaints made against the company.

When Mikulski revealed her concerns Fairbanks president Bill Garland released a statement saying the company "will certainly to seek to address directly with Senator Mikulski and her staff any concerns the Senator may have about Fairbanks' servicing practices."

Also, in March Standard & Poor's placed Fairbanks' residential subprime and residential special servicer rankings on CreditWatch with negative implications, reflecting "increased regulatory scrutiny over the company's servicing practices."

Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: [email protected]

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders