Banking and Finance Law Daily Maryland A.G. settles with reverse mortgage servicer over illegal inspection fees
Wednesday, April 17, 2019

Maryland A.G. settles with reverse mortgage servicer over illegal inspection fees

By Nicole D. Prysby, J.D.

Reverse mortgage servicer Celink and the Maryland A.G. have reached a settlement that resolves allegations from the state that the servicer charged homeowners illegal inspection fees. After being warned by the state not to do so in 2013, Celink continued to charge illegal fees through the end of 2016. Celink will refund all fees, and has paid $5,000 for inspection costs and a civil penalty of $50,000.

The Maryland Attorney General HAS announced a settlement agreement with Compulink Corporation (dba Celink) resolving allegations that the reverse mortgage servicer charged homeowners illegal inspection fees. Maryland law prohibits passing the costs of inspections on to homeowners, and, after being warned not to do so in 2013, Celink continued to bill homeowners for inspections until January 2017. Celink has paid $5,000 to the state in connection with the costs incurred investigating the matter and a civil penalty of $50,000. Payments from Celink will be deposited into a settlement amount to be used for the payment of any refunds not yet made, and then deposited into the state Mortgage Loan Servicing Practices Settlement Fund.

According to the allegations in the Assurance of Discontinuance (in which Celink admits no liability), Celink charged lender inspections fees in violation of Maryland law and, in 2013, the state put Celink on notice that the inspection fees were prohibited and that it should correct its policies. Celink continued to charge inspection fees for more than three years, until updating its practices in December 2016. Between January 2010 and January 2017, Celink assessed over $43,900 in property inspection fees on 2,317 mortgage transactions. Celink has refunded or attempted to refund the property inspection fees at issue.

Under the settlement, Celink has agreed not to charge or collect property inspection fees in connection with Maryland residential mortgage loans and not to assist anyone who attempts to do so. The company provided the A.G.’s office with a spreadsheet documenting the inspection fee assessments and the status for each (refunded, reversed, credited, attempted, etc.). Celink will also send a notice to each servicer to which it sold or transferred sub-servicing rights for a mortgage on which it assessed but did not collect an inspection fee. The notice will inform the sub-servicer that the inspection fees should be refunded or not collected from the consumers.

Companies: Compulink Corporation

MainStory: TopStory ConsumerCredit EnforcementActions MarylandNews Loans Mortgages StateBankingLaws

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