Media Probe Spurs Texas AG Lawsuit Alleging That Unlawful Servicer Collection Tactics Squeezed Late Fees From Homeowners, Driving Them Into F'closure

In Dallas, Texas, KDFW-TV Channel 4 reports:

• Just two weeks after a FOX 4 investigation, the Texas Attorney General is cracking down on a local mortgage servicing company. In our investigation, FOX 4 showed how the AG's office told complaining consumers it was too busy and they should hire their own attorneys to fight American Home Mortgage Servicing, Inc.

• But that has suddenly changed. Now, the Texas Attorney General has sued the Coppell-based company, accusing AHMSI of aggressive and unlawful tactics to collect mortgage payments from Texas homeowners and has filed suit.

For more, see Texas Attorney General Sues Mortgage Servicing Company.

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From the Office of the Texas Attorney General:

• Texas Attorney General Greg Abbott [] charged Coppell-based American Home Mortgage Servicing Inc. (AHMS) with using illegal debt collection tactics and improperly misleading struggling homeowners.

• According to state investigators, AHMS collections agents used aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations. The defendant also failed to credit homeowners who properly submitted their payments on time.

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• In other cases, AHMS agents falsely claimed that homeowners did not make payments so the agents could justify profitable late fees or escrow accounts. The defendant also failed to properly credit homeowners after AHMS agents withdrew funds from the homeowners’ checking accounts. Because of the defendant’s unlawful conduct, homeowners defaulted on their loans, leading to foreclosure proceedings.

For the Texas AG press release, see Attorney General Abbott Charges Home Loan Servicer With Violating State Debt Collection Laws (American Home Mortgage Servicing Inc. failed to properly process requests).

For the lawsuit, see State of Texas v. American Home Mortgage Servicing Inc.