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Nationstar Mortgage agreed to settle an action commenced by the Consumer Financial Protection Bureau for $91 million to resolve allegations surrounding mortgage servicing misconduct and deceptive practices that resulted in financial harm to borrowers.
The proposed settlement was filed in the United States District Court for the District of Columbia on Dec. 7, 2020. If approved by the court, the stipulated judgment will resolve a number of claims raised by the Consumer Financial Protection Bureau and Attorneys General in every state against Nationstar Mortgage concerning wrongful conduct in connection with the servicer’s alleged compliance violations and purported history of operational failure.
According to the complaint filed by the CFPB, Nationstar Mortgage — also known as Mr. Cooper — engaged in alleged misconduct and abusive mortgage servicing practices spanning from 2012 to 2015 in violation of the Consumer Financial Protection Act of 2010. The complaint states that the company serviced nearly two million loans in 2014 and currently services loans for three million borrowers with a total of roughly $500 billion in unpaid principal loan balances.
Specifically, the complaint alleges that Nationstar Mortgage, the third-largest mortgage servicer in the U.S., violated the law by improperly increasing permanently modified monthly loan payments, wrongfully foreclosing on mortgages, failing to honor loan modification agreements, and mismanaging escrow accounts.
According to the CFPB’s complaint, the mortgage servicer also failed to remove private mortgage insurance timely from accounts under the Homeowner’s Protection Act (HPA), as well as pay property tax disbursements on time in violation of the Real Estate Settlement Procedures Act (RESPA).
Despite its written promises, Nationstar Mortgage “initiated foreclosures and even sold borrowers’ homes while the borrowers’ loss mitigation applications or appeals were pending,” as alleged in the CFPB’s complaint. The complaint also maintains that there was at least one instance in which a borrower had accepted a modified mortgage and was wrongfully foreclosed upon, despite performing on the mortgage. In other instances, as stated in the complaint, borrowers met the criteria for permanent modifications of their mortgages but the company increased payments wrongfully, resulting in foreclosure on some borrowers.
The CFPB’s complaint also says that the mortgage servicer failed to analyze escrow accounts, creating shortages in the accounts of borrowers who were making mortgage payments in accordance with a Chapter 13 bankruptcy plan approved by the court. The complaint contends that Nationstar Mortgage would then initiate attempts to collect on the deficiencies without getting the required permission from the bankruptcy court.
Additionally, the Attorneys General allege in their complaint that the mortgage servicer violated state consumer protection laws which prohibit unfair practices and deceptive acts, as well as the Consumer Financial Protection Act of 2010.
The settlement came after a multi-year investigation which involved the efforts of the CFPB and state bank regulators.
Illinois Department of Financial and Professional Regulation Secretary Deborah Hagan stated in a CFPB press release, “This settlement demonstrates the crucial role of state financial services regulators in ensuring that homeowners are protected as they obtain and pay down their mortgages—especially homeowners who may be struggling with making their payments.”
In a statement concerning the settlement, Jay Bray, president and CEO of Nationstar Mortgage remarked, “We are pleased to resolve this matter. When these issues were identified several years ago, we immediately made restitution to our impacted customers and invested in process improvements to prevent reoccurrence.”
What Are the Terms of the CFPB’s Settlement Agreement with Nationstar Mortgage?
What Are the Terms of the CFPB’s Settlement Agreement with Nationstar Mortgage?As part of the settlement, Nationstar Mortgage is required to enhance its error resolution policies and processes for handling consumer complaints.
The stipulation mandates that the mortgage servicer maintain a consumer complaint form online that is accessible to borrowers, and provide accurate information to borrowers concerning how they may submit their complaints. Additionally, the company must accurately indicate each error identified in a borrower’s complaint and communicate the corrections made to the borrower.
The settlement agreement also includes provisions for proper escrow management and analysis, servicing transfers, loss mitigation practices, communications concerning private mortgage insurance cancelations, as well as an annual lookback and redress plan.
Nationstar Mortgage must also submit a compliance plan to the regional director outlining the steps the mortgage servicer will be taking to ensure the actions mandated in the agreement are effectively carried out.
The $91,255,843 settlement will allot over $22 million in consumer remediation, in addition to the $62 million in remediation that was previously provided to consumer borrowers. Under the agreement, Nationstar Mortgage must also pay out $1,205,000 to the participating states in administrative costs and penalties, $3,860,900 in attorneys’ fees, investigative costs and fees pursuant to the Attorney General Consent Judgment and $1.5 million in civil monetary penalties to the CFPB.
The Nationstar Mortgage Settlement is The State of Alabama, et al. v. Nationstar Mortgage LLC, Case No. 1:20-cv-03551 and Bureau of Consumer Financial Protection v. Nationstar Mortgage, Case No. Case 1:20-cv-03550 filed in the United States District Court for the District of Columbia.
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54 thoughts onNationstar Mortgage Agrees to $91M Settlement with the CFPB
Please add me.
How can I join this lawsuit? They went up on my loan balance after taking over my mortgage loan.
How do we join this lawsuit
Nationstar/Nr. Coooer stole my home after 12 years of homeownership. It has left me in a deep state of depression. I submitted the form but no one has reached out to me with regard to the monies I may recover. Who do the claimants turn to?
do i qualify for this law suit?
Mine is a long comment covering 4years and 2 months. My husband and I split in January of 2017 while I was recovering from a brain injury and a stroke. he agreed to make the payment and I would start in May. I called May to make the payment and they said I owed for 3 payments. I tried to make payments for the back due,, We had been with then for years. they woud not work at all with me. So I started the bankruptcy proces. It seems they are like the mortgage co. So are all the people who promise to help you with the loan modification. Then I spent 13 months 3 days a week attepthing aloan modification That was turned downed to one piece of paper After several thousands of dollars I have a great law firm in SC… Demott Law Firm.. They have done everything they could..However due to Covid I llost 50@ of my income. I have recoverd but now Im 2 months behind soon to be only one month behind.. It seems that Nationstar/Mr Cooper doest have a company that cares at all about there customers—no mater ow much there ckients care about there family and there homes—how many people got piece of mail with no identifation only to open with a deadline for nov 20 wich was after deadline and you couldnt join.. Thats what happened to me
I have reported nationstar to everyone for many years and I can’t believe something has not been done.they have committed so many fraudulent practices it is unbelievable.they destroyed my life.
Is it too later to join the class action law suit?
I reported to cfpb at least 6,7,or8 times what they were doing. They told me they took keep your home calif all the time until after 10 months of letting me get behind they decided not to take it. Now to far behind to catch up. This is after my husband died and was having to deal with them constantly. They modified my loan by raising interest two and a quarter higher than it was. Didn’t know when they sent email which said if I made my first three payments of 1058 on time they would modify. I made my payments on time that’s when I learned they had raised interest now payment was 1450. I don’t know what the 1058 was. So now really couldn’t afford payment. I had to sell my house of forty three years where my husband and I raised our children and I was devastated to leave behind the only secure place I had. It was our first home and we just decided to stay so everything familiar was really gone now since I sold my house I feel lost I just want to go home. Never going to happen they are cruel had to have Freddie Mac actually call do the mod people because there was always one paper they didn’t have I stayed on phone with woman to make sure she got my email she said she did they then in two weeks told me they still hadn’t received it and now was over time limit and would have to start at beginning. That’s the game the facing the paperwork they never have it all and it becomes so frustrating I think people just give up..
Nationstar/Mr Cooper is the worst! I have many stories about how they have treated me. I believe i qualify for many Law suits againest them. My mortgage was due on the 1st of Oct, on the 19th they sent a man over to my house to take pictures for forclosure and charged me for the service that the man provided. I tried to get a loan mod, i emailed, faxed, us mailed, the paperwork, approx 10 each, the claim they never received it. I kept calling them telling them that i don’t have to pay PMI anymore , I paid over 20% of loan off, they kept charging me & saying “Chase is requiring that I keep paying my PMI each month” I’m self employed they never would have excepted my mortgage loan, then i told them that “they purchased the loan from someone else” i did not qualify for hamp because i was a single woman, if i would have been going threw a divorce that i would have qualified. they told me i would qualify for harp, but i have to be late on one payment, so i did that, made 2 payments the following month, then they told me i would not qualify for either hamp or harp. I was paying escrow, i noticed the escrow acct went from $300.00 to $0.00, i know nothing had been paid by them for this amount. I called them, they lied, they said they don’t owe me money, finally after many phone calls i talked to a supervisor, i got a check from them for that amount (no interest was paid to me) Nationstar doesn’t answer their phones, they just hang up. Nationstar leaves horrible v/m messages to call them, but they don’t answer their phones. I really wish they would not have bought my mortage.