The Consumer Financial Protection Bureau yesterday filed a lawsuit and a proposed stipulated judgment that will result in nearly $85 million in redress and penalties paid by a nationwide mortgage servicing company that was accused of engaging in unfair and deceptive acts when it failed to honor loan modification agreements it had entered into with borrowers.
A copy of the complaint, filed in the District Court for the District of Columbia, can be accessed by clicking here. A copy of the stipulated judgment can be accessed by clicking here.
Along with settling with the CFPB, Nationstar Mortgage, which does business as Mr. Cooper, also reached agreements with attorneys general from all 50 states as well as the District of Columbia and Puerto Rico, and bank regulators from 53 different jurisdictions.
Nationstar allegedly foreclosed on borrowers whom were promised that they would not be foreclosed upon while their loss mitigation actions were pending, improperly increased payments that had been permanently modified, misrepresented that borrowers would be eligible to have their private mortgage insurance canceled, and failed to remove private mortgage insurance from borrowers’ accounts in a timely manner. The alleged infractions took place between January 2012 and December 2016. Approximately 40,000 homeowners were affected by Nationstar’s actions, according to the CFPB.
Unde the terms of the settlement, Nationstar — the nation’s fourth-largest mortgage servicer — will have to set aside nearly $16 million to pay back to borrowers, along with certifying that it had already made $57.5 million in redress payments. The company will also have to pay $6 million in fines and penalties to the CFPB and the states.
“Today’s action is the culmination of a multi-year effort working with our state partners to investigate Nationstar’s failings, which resulted in substantial consumer harm,” said Kathleen Kraninger, the Director of the CFPB, in a statement. “We had a strong partnership with our state counterparts in this case and I thank them for all their support in this case.”
Nationstar has also agreed to make changes to its policies and procedures as a result of the investigation.
