BSI Failed to Provide Qualified Homeowners with Mortgage Relief at the Height of the Pandemic and instead Required Them to Make Payments
New York Attorney General Letitia James today recovered $350,000 for hundreds of homeowners from the mortgage servicer, Servis One, Inc. d/b/a BSI Financial Services, Inc. (BSI), for failing to offer mandated mortgage relief to homeowners who could not make payments at the height of the COVID-19 pandemic. An investigation by the Office of the Attorney General (OAG) found that BSI encouraged homeowners who faced financial hardships or lost their job during the pandemic to continue making partial payments on their loans and did not offer mandatory relief. As a result of this agreement, BSI will pay $350,000 in penalties and restitution to as many as 160 homeowners in Rochester, New York City, and Long Island who were not offered the relief they were entitled to from BSI.
“During the height of the pandemic, as we were grappling with fear, stress, and financial difficulties, these homeowners were denied the basic support they were supposed to receive,” said Attorney General James. “BSI violated the law and left hundreds of families worrying about keeping a roof over their heads when they qualified for mortgage relief. Today’s agreement will put money back into homeowners’ pockets and continues our efforts to protect hardworking New Yorkers.”
At the start of the COVID-19 pandemic, federal and state authorities passed laws and regulations requiring the mortgage industry to provide temporary assistance to homeowners facing financial hardship. Mortgage loans backed or insured by federal authorities were subject to certain requirements that allowed homeowners facing a hardship to defer their mortgage payments for up to 12 months in 2020 and 2021. New York provided similar assistance to New York homeowners with loans that were not federally-backed, which required mortgage servicers to offer similar relief to homeowners with privately-owned mortgages.
The OAG found that BSI violated the law by failing to provide qualified homeowners mandatory mortgage relief. In one instance, a homeowner told BSI that he had lost his business income due to the pandemic and struggled to make payments. The agent told the homeowner to use his unemployment benefits or reduced income to make partial payments, although the homeowner was entitled to mortgage relief. In other instances, BSI allowed payments to be deferred only on a month-to-month basis, and in at least one instance, BSI told a homeowner that additional relief would be contingent on their willingness to make partial or future payments. In all of these instances, BSI failed to inform homeowners of their rights to defer their mortgage payments for up to 12 months.
Today’s agreement requires BSI to provide restitution to certain current and former customers with privately-owned mortgages whose loans were subject to relief requirements. BSI is required to offer forbearance relief to homeowners whose mortgage loans are currently serviced by BSI and who suffered a financial hardship but were initially denied mortgage relief. In addition, BSI will provide restitution of up to two monthly mortgage payments to homeowners whose loans were previously serviced by BSI and who suffered a financial hardship, but who were not offered mortgage relief.
Eligible homeowners will be contacted about this agreement and provided instructions for claiming restitution.
Attorney General James asks any homeowner who believes that their mortgage servicer is not offering proper loss mitigation options in the event of an economic hardship to file a complaint online with OAG's Consumer Frauds and Protection Bureau or call the office at 1-800-771-7755.
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