""American Home Mortgage Servicing Inc."":https://www.ahmsi3.com/servicing/home.asp (AHMSI) signed a settlement with Massachusetts ""Attorney General Martha Coakley"":http://www.mass.gov/?pageID=cagohomepage&L=1&L0=Home&sid=Cago agreeing to implement a consent judgment between the Commonwealth of Massachusetts and Option One Mortgage Corporation, which was acquired by AHMSI in April 2008.[IMAGE]
""It's important to understand that at no time did the Commonwealth allege that AHMSI engaged in any wrongful conduct in either the origination or the servicing of these loans,"" said Jordan Dorchuck, chief legal officer of AHMSI.
""In November 2008, AHMSI was dismissed as a party to the case except to the extent necessary to provide affected borrowers with an adequate legal remedy,"" Dorchuck said.[COLUMN_BREAK]
In conjunction with the settlement, Coakley also dismissed claims against Coppell, Texas-based AHMSI. The servicer did not incur civil penalties or any other costs.
The consent judgment requires Option One Mortgage Corporation Ã¢â‚¬" now known as Sand Canyon Corporation Ã¢â‚¬" to instruct AHMSI to complete loan modifications for loans in default of likely to go into default.
The required loan modifications resemble and often include the HAMP Principal Reduction Alternative program, under which a percentage of the principal balance on a loan may be forgiven over time if the borrower remains current on modified payments.
The consent judgment applies to less than 5,500 of the 8,000 loans Option One originated after January 2004. These loans are now being serviced by AHMSI.
AHMSI has been given 90 days to implement the loan modification program.
""[T]he purchase and sale documents entered into in connection with the 2008 acquisition of Option One's servicing business gave Sand Canyon the authority to direct AHMSI to modify or attempt to modify the terms of these loans, and that is what AHMSI agreed to do in the Settlement Agreement,"" Dorchuck said.
Managing nearly $74 billion in loans, AHMSI, is the 15th largest mortgage servicer in the U.S.