Nationstar Mortgage agreed on Wednesday to pay $1.75 million to the Consumer Financial Protection Bureau for failing to accurately report home mortgage data that is used to identify discrimination.
Though no consumers were affected, the CFPB said that the magnitude of the errors, history of violations and market size of Nationstar, based in Coppell, Texas, led the agency to assess its largest civil penalty ever for violations of the Home Mortgage Disclosure Act of 1975.
Under the HMDA, financial institutions are required to disclose certain data found in mortgage applications such as race, gender and whether a home loan was approved, denied or withdrawn.
Nationstar, which is publicly traded, had been on notice since 2011 of HMDA compliance problems, the CFPB said.
"Those required to report this information must make more careful efforts to follow the law,” CFPB Director Richard Cordray said in a press release. "Today we are sending a strong reminder that HMDA serves important purposes for many stakeholders in the mortgage market."
Nationstar said the settlement stemmed from a two-year-old review of the company's data from 2012 to 2014.
"We regret the mistakes that led to the reporting errors," the company said in a press release. "Nationstar understands how accurate HMDA data is critical to fair lending."
"The settlement does not reflect any wrong-doing impacting customers or fair lending; but rather, technical data issues that we have worked tirelessly to resolve through significant investments," the company added. "These data issues are not reflective of our customer and compliance-driven business practices, and we remain committed to treating every applicant fairly and responsibly."
The CFPB reviews the accuracy of HMDA data as part of its supervisory authority over large banks and nonbank mortgage lenders.
Nationstar’s HMDA compliance systems generated mortgage lending data with "significant, preventable errors," the CFPB said. Nationstar had error rates of 21% in 2014, 33% in 2013 and 13% in 2012, the bureau said.
The bureau said Nationstar failed to maintain detailed HMDA data collection and validation procedures. The company also produced discrepancies in the data by failing to consistently define certain data among its various lines of business.
In addition to the civil penalty, Nationstar agreed to develop and implement an effective compliance management system and to fix HMDA reporting inaccuracies.
The company will review, correct and make available its corrected HMDA data from 2012 to 2014, the CFPB said.
