Mr. Cooper agreed to pay out over $91 million to consumers and state and federal regulators in order to settle allegations of misconduct in its servicing practices.
The charges cover problems with loan modifications, foreclosures and mortgage insurance policy cancellations dating as far back as 2011. The complaints were first raised in a pair of examinations conducted by a consortium of state regulators in 2014, when the Dallas company was operating under the Nationstar name. In 2018, the servicer was
"Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners," Consumer Financial Protection Bureau Director Kathy Kraninger said in a press release. "Nationstar broke that trust by engaging in unfair and deceptive practices prohibited by the Consumer Financial Protection Act of 2010, as well as violations of the Real Estate Settlement Procedures Act and the Homeowner's Protection Act."
In agreeing to the settlement, Mr. Cooper did not admit any wrongdoing or to violating applicable laws.
"When these issues were identified several years ago, we immediately made restitution to our impacted customers and invested in process improvements to prevent reoccurrence," Jay Bray, Mr. Cooper's chairman and CEO, said in a statement.
The charges were brought by the CFPB, the attorneys general from all 50 states, and mortgage regulators from 48 states plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The only state mortgage regulators not listed were Colorado and New York.
Mortgage regulators from the Empire State participated in the 2014 multistate origination and servicing examinations that
"Multistate supervision and enforcement actions like today's exemplify the power of states working together to regulate financial services, protect consumers and local economies," said John Ryan, president and CEO of the Conference of State Bank Supervisors. "States working together and with their federal counterparts is the future of industry oversight."
The CSBS said it worked with the American Association of Residential Mortgage Regulators on the state enforcement portion of the case.
According to the settlement, $62.6 million in consumer remediation was completed prior to the agreement. That included payments to consumers affected by issues related to the company's loan modification, private mortgage insurance cancelation, escrow and loss mitigation practices. That amount also included violations cited in the origination examination, such as charging impermissible fees.
An additional $15.6 million will be paid to consumers affected by Nationstar's loan mod, escrow and foreclosure practices. Another $6.4 million will go to borrowers who had been harmed by servicing transfer and property preservation practices, which involved loans that were transferred to Nationstar between 2011 and 2017. Part of that $6.4 million will cover properties that were erroneously declared vacant, for which the company had the locks changed.
Mr. Cooper will also pay $1.5 million in a CFPB consent judgment, $1.2 million to the states for an administrative penalty and costs, plus $3.9 million in attorney's fees.
