Investigation Found Company Inflated Property Preservation Fees and Insurance Premiums Charged to Massachusetts Homeowners
Altisource Solutions, a company aimed at providing pre-foreclosure property preservation services, has agreed to pay $550,000 in fines stemming from allegations that it “unfairly and illegally profited from distressed Massachusetts homeowners in violation of state consumer protection laws.”
“Altisource, through its close relationship with Ocwen, unfairly profited from charging homeowners for expensive and duplicative coverage and services that they did not need,” said AG Healey. “This settlement will provide relief to borrowers and require the company to change its practices going forward.”
According to the Attorney General’s office, until 2009 Altisource’s parent company was a subsidiary of Ocwen. If our readers remember, the Attorney General filed a lawsuit against Ocwen ultimately obtaining a $2 million dollar settlement with the company in March of 2019. In that complaint, the AG’s Office alleged that Ocwen was charging homeowners “…unnecessary property preservation fees, failed to comply with homeowners account dispute processes, failed to properly administer insurance escrow accounts, and procured overpriced and often unneeded force-placed insurance policies for homeowners.”
After filing suit against Ocwen, the AG”s Office opened an investigation into Altisource and its practices within the Commonwealth. In Massachusetts, Altisource provides exclusive property preservation services to Ocwen for the purpose of protecting the mortgagee’s interest in a distressed property. When a homeowner defaults on their mortgage payments, Altisource conducts regular property inspections to determine if the property is occupied or being maintained. Altisource also performs maintenance on the property ranging from grass cuts and snow shoveling to major repairs and winterization.
The assurance of discontinuance, filed in Suffolk Superior Court, resolves allegations that Altisource Solutions Inc. performed unnecessary and duplicative pre-foreclosure inspections and property maintenance services. The company also received improper commissions for procuring force-placed insurance policies on behalf of the mortgage servicer Ocwen Loan Servicing LLC. Altisource then passed the costs of these unnecessary services and commissions on to the accounts of distressed homeowners through Ocwen.
Under the settlement terms, the company will pay the fine which will be used in part to reimburse those homeowners charged the excessive premiums for their forced-place insurance. In addition, the company also has agreed to modify its business practices going forward in order to prevent unnecessary inspection and maintenance services.
