Nationstar Mortgage is ordered to pay $73 million for mistreating borrowers
Nationstar Mortgage, which operates under the brand Mr. Cooper, was ordered to pay $73 million to roughly 40,000 homeowners for repeatedly failing to provide even the most basic operations as a mortgage servicing company over four years, the Consumer Financial Protection Bureau said.
The CFPB and 48 states alleged in their complaint that Mr. Cooper failed to do a laundry list of basic services for the mortgages it serviced from 2012 to 2016, including failing to identify mortgages that were in loan modification plans, and failing to disburse borrowers’ property tax payments.
The company also failed to inform borrowers when they no longer needed to make private mortgage insurance payments, kept them paying for private mortgage insurance when they no longer had it and foreclosed on borrowers after promising it wouldn’t foreclose while forbearance applications were pending, according to the agency.
The bureau alleged that Nationstar violated several federal consumer financial laws, “causing substantial harm to the borrowers whose mortgage loans it serviced, including distressed homeowners.”
Nationstar will pay approximately 40,000 borrowers about $73 million in refunds and damages, and will pay a $1.5-million fine to the CFPB. The company is settling independently with the 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.
“The illegal practices of mortgage servicers like Nationstar left struggling borrowers to pick up the pieces,” California Atty. Gen. Xavier Becerra said in a statement. “As we’re now faced with another economic crisis, it is critical that mortgage servicers and all financial institutions take seriously their obligations to borrowers and their role in the larger financial system.”
In a statement, the company said it identified these problems several years ago and is “pleased to resolve this matter.”
Nationstar is one of the nation’s largest mortgage servicers and the largest U.S. nonbank mortgage servicer.