Mr. Cooper sues vendor over costly servicing incident

Mr. Cooper wants ACI Payments to further pay up for its servicing mistake two years ago which impacted borrowers' bank accounts for a combined $2.3 billion. 

The Greater Dallas-area servicer, under its Nationstar Mortgage name, is suing the vendor in a Texas federal court for unspecified damages. The subsidiary of ACI Worldwide in June paid a $25 million fine to the Consumer Financial Protection Bureau for illegally charging borrowers in April 2021. 

Contractors for ACI caused the incident that month when they used Nationstar's confidential customer information in quality assurance testing, which inadvertently triggered mortgage payment withdrawals at borrower's banks. Depositories in the process charged 100 customers overdraft or insufficient fund fees, and froze the accounts of others. 

"ACI's use of Nationstar's confidential information in the Incident and leading up to the Incident was not a purpose contemplated by the Speedpay Agreement," wrote attorneys for Mr. Cooper, referencing the firms' vendor agreement with ACI's predecessor. 

A representative for Mr. Cooper declined to comment on the lawsuit Monday but said the servicer had since severed ties with ACI. A spokesperson for ACI Monday referred to the company's June statement regarding the CFPB fine, in which the firm admitted no wrongdoing. 

The technology provider earlier this year also established a $5 million settlement fund to quell seven class action lawsuits stemming from the 2021 charge. Insurers will fund "substantially all" of the settlement payments and attorney's fees, ACI said in a Securities and Exchange Commission 10-Q filing at the end of the second quarter. 

No customer funds nor personal information was compromised in the lapse, according to ACI. 

Mr. Cooper in its recent complaint emphasized the shame that followed the incident, suggesting nationwide headlines damaged the servicer's reputation and upset customers. The business itself has battled 10 federal class action lawsuits and two individual state claims. It also incurred expenses in attorney's fees, payments to customers, notice distribution, and increased compliance and call center labor. 

ACI in June blamed the error on Speedway, noting the incident occurred shortly after ACI assumed management of Speedway's legacy data environment. The company purchased Speedway in 2019, just short of two years before the incident. 

The servicer's lawsuit was initiated ahead of an Oct. 31 statute of limitations to file a claim against ACI. It's suing the vendor for 11 counts including breach of contract, gross negligence and trade secrets violations. A summons for ACI was issued Friday in the U.S. District Court for the Northern District of Texas in Dallas.