broker price opinion

2 mortgage firms to forgive debt

CHARLESTON, W.Va. -- Two national mortgage servicing companies accused of charging illegal fees and intimidating homeowners agreed to forgive nearly $11 million in debt to 267 West Virginians who lost their homes in questionable foreclosures.

Fairbanks Capital Corp. of Salt Lake City, now called Select Portfolio Servicing, and Homecomings Financial Network Inc. of Dallas settled complaints against them, officials announced Thursday.

In addition to forgiving the debt, the two companies also paid $773,000 in restitution.

The settlements were reached earlier in the year, but announcement was delayed until terms were fulfilled, Attorney General Darrell V. McGraw Jr. said.

The companies were accused of charging illegal fees including excessive late fees, property preservation and inspection fees, corporate advance fees and broker price opinion fees. When customers paid less than the companies said they owed, their checks were returned, which made foreclosure more likely, McGraw said.

Both companies denied wrongdoing and agreed to abide by West Virginia consumer protection and mortgage financing laws. They continue to do business in the state.

Homecomings Financial "did not initiate wrongful foreclosures nor did it engage in mortgage servicing abuses," said Stephen J. Dupont, spokesman for GMAC-RFC/Homecomings Financial.

Craig Bullock, executive vice president of Select Portfolio Servicing, said the company has substantially changed its practices in the last two years, with new management, a new name and a new focus on customer service.

"We were happy to be able to work with the attorney general's office to work through these customer concerns," Bullock said.

The company has reached similar settlements with the Federal Trade Commission and residents in Florida and Michigan. In all settlements it did not admit wrongdoing.

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