Paying to cover up?

Say your mortgage company is highly regarded in part because of your low customer default rate.  Say as well that your low customer default rate is because you pay off some of the mortgages that otherwise would be in default.  Is that kosher?

“Lender Masked Borrower Debt Woes,” The Wall Street Journal, March 9, 2017 B1.  Renovate America Inc., which is involved in solar panel financing, paid off customer debts (secured by their homes) to avoid having to report defaults (or, perhaps, to avoid the customers’ making complaints to the state governments behind the loans).  How will investors in your company react to the news?  If it’s only a hundred customers out of 90,000?  $175,000 versus $1 million?

Is it material?  Not the amount of the repayments but the mere fact that the company was making any such payments?  Surprised by the fact that the allegations come from three former members of the company’s compliance department?  What else aren’t you being told?

 

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Filed under Accuracy, Board, Compliance, Controls, Corporation, Data quality, Directors, Duty, Employees, Governance, Inform market, Inform shareholders, Internal controls, Investor relations, Oversight, Oversight, Supervision

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