Caliber Agrees to $17 Million N.Y. Mortgage Settlement (1)

Caliber Home Loans Inc. agreed to provide as much as $17 million in forgiveness to New York borrowers who entered into short-term, interest-only loan modifications, as part of a settlement with the state’s attorney general.

New York Attorney General Letitia James (D) on Tuesday said the loan servicer violated state mortgage servicing regulations by placing struggling homeowners into loan modifications that resulted in balloon payments after five years that borrowers would not be able to pay.

Under the settlement, the company will move all affected borrowers into a “N.Y. Principal Reduction Modification” that reduces the total amount owed and extends ...