Get Your Mortgage Rate Quote in Just 30 Seconds

Mortgage rates change every day, and your rate will vary based on your location, finances, and other factors. Get your FREE customized rate comparison below.

Bi-Weekly Program Lands Servicer in Hot Water

Advertisements for a bi-weekly payment program that didn’t deliver as promised have resulted in regulatory orders and millions of dollars in penalties against a payment processor and the servicing subsidiary of Fidelity National Financial Inc.

Paymap Inc. has marketed its Equity Accelerator Program
since July 2011. The electronic payment system promised to automatically make bi-weekly mortgage payments on behalf of borrows.

Advertisements mailed to prospective clients allegedly promised
tens of thousands of dollars in interest savings even though there was no supporting evidence for the claim. On its website, average savings were quoted at more than $33,000.

Paymap collected a $295 enrollment fee and $2.50 per automatic debit made to the borrower’s bank account, according to a news release from the Consumer Financial Protection Bureau.

In all, Paymap received $33.4 million in total fees.

“In fact, the Equity Accelerator Program did not make more frequent payments on consumers’ mortgages,” the CFPB said.

But it did make more frequent withdrawals from their bank accounts.

As a result, just a “tiny percentage, if any,” of the borrowers saved that much in interest, according to the regulator.

Paymap partnered with mortgage servicers to market the program to their borrowers.

One of those servicers was Fidelity-subsidiary LoanCare
LLC, which participated in the program during 2012.

LoanCare borrowers were sent solicitations on the
Virginia Beach, Virginia-based servicer’s letterhead. In return it received a portion of the fees.

The CFPB alleges that the pair of companies violated the
Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against deceptive acts and practices.

Separate consent orders were issued by the bureau against Paymap and LoanCare.

The orders require the companies to stop the deceptive and illegal adverting and to provide credible evidence for claims they do make.

Paymap is required to return the $33.4 million in fees it collected to the consumers
and pay a $5 million civil penalty.

LoanCare is required to pay an $0.1 million penalty.

Popular posts

7 Refinance Strategies
7 Refinance Strategies

Refinance to a lower interest rate: If interest rates have dropped since you took out your original mortgage, refinancing to a lower rate can help you save money on your monthly payments and reduce the overall cost of your loan. Refinance to a shorter loan term:...

7 Refinance Strategies
Is Refinancing With Your Present Lender Preferable?

Do Not Accept the First Refinancing Offer You Receive Homeowners should not accept the first refinancing rate provided to them. This is particularly important if you are applying with your existing lender. Some mortgage lenders have mechanisms in place that prioritize...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

Fannie Mae Profile

Fannie Mae Profile

Last Updated December 27, 2018 7:38 PM Central   full list | other directories | bank search | SEC...