Nationstar Mortgage LLC (trade name: Mr. Cooper), a mortgage loan broker and servicer, will be shelling out more than $90 million to settle an investigation related to deceptive practices and loan violations.
This investigation was conducted by multiple state and federal regulatory agencies, including all of the state attorneys general and the Consumer Financial Protection Bureau, as well as the Arkansas Securities Department. The agencies allege that the loan broker violated residential mortgage origination regulations, such as mishandling loan modifications, conducting wrongful forecloses, failing to terminate private mortgage insurance when conditions were met and more.
According to a settlement and consent order, the investigation found that Nationstar had committed multiple violations, including failure to properly calculate per diem interest, overcharging of per diem interest, making loans in excess of the usury rate, failure to determine borrowers’ ability to repay, failure to properly maintain record and failure to provide timely and accurate information to states, “violations related to the failure to timely fund mortgages,” failure to provide timely disclosures and documents related to loan origination activity, violations related to failures to ensure compliant advertisements, unlicensed loan officer activity, failures to obtain regulatory approval for working at certain locations, and “general other operational failures related to the origination process.”
More than 115,000 consumers across the nation were impacted by these violations, according to an Arkansas Securities Department release.
In total, Nationstar will be required to pay $91,255,843 in penalties and remediation. Of this total, the largest amount – $62,632,538 – will go to consumer borrowers. Under the settlement order, Nationstar will also pay $15,623,305 for consumer remediation under CFFB Consent Judgement, $6,434,100 for consumer remediation to states, $1,205,000 for administrative costs and penalty, $1,205,000 for administrative costs and an administrative penalty, $3,860,900 for attorney’s fees, investigative costs and fees, and $1,500,000 for a civil monetary penalty.
The company will also be required to pay “additional amounts to certain consumers with active loan modifications.” It will also have enhanced servicing standards for three years as well as additional regulatory oversight and corporate disclosure.
Nationstar will pay $517,292 to 490 consumers, as well as $750,000 in civil penalties that will be distributed evenly to participating states.
“This settlement holds Mr. Cooper accountable for harm done to Arkansas homeowners and requires a change in behavior,” Arkansas Securities Department commissioner Eric Munson said in a statement. “A home is the largest purchase many people will make in their lifetime, so it is important that mortgage servicing companies know that we are watching.”
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