On the same day that Mr. Cooper announced it
The Justice Department's U.S. Trustee office, which oversees the administration of bankruptcy cases and private trustees, came to its own agreement with Mr. Cooper, U.S. Bank and PNC Bank regarding noncompliance with the Bankruptcy Code and Federal Rules of Bankruptcy Procedure, which impacted over 60,000 accounts at all three companies, dating back to 2011.
Those failures resulted in payment application errors, inaccurate, missing and untimely bankruptcy filings and delayed escrow statements, the DOJ said.
"The failure of mortgage servicers to comply with those requirements compromises the integrity of the bankruptcy system and the ability of homeowners to receive a fresh start," said Cliff White, the director of DOJ's U.S. Trustee Program.
For Mr. Cooper, which was known as Nationstar until 2018, the agreement memorializes over $40 million in payments the company made to affected borrowers. The U.S. Trustee’s agreement includes the $22.84 million in remediation to bankrupt borrowers in the CFPB settlement. Mr. Cooper will pay an additional $17.84 million for bankruptcy-specific conduct for the U.S. Trustee case.
U.S. Bank has or will provide $29 million in credits and refunds, the DOJ stated. The bank also waived approximately $43 million in fees and charges across its mortgage servicing portfolio, including for borrowers in bankruptcy.
U.S. Bank said the issues were first identified in 2014 and the bank took corrective actions the following year, with certain customers receiving remediation.
"Our agreement with U.S. Trustee includes additional customer remediation, which we expect to complete in the coming months," U.S. Bank said in a statement. "We take our responsibility to our customers seriously and worked quickly to ensure our bankruptcy processing is performed in a fair and compliant manner."
The Justice Department also issued a letter acknowledging that PNC provided close to $5 million in credits and refunds, as well as additional remediation in the form of lien releases and debt forgiveness.
"We're pleased to put this matter behind us and we appreciate the assistance of the U.S. Trustee's office as we worked to address it," a statement from PNC Bank said. "As outlined in the acknowledgement, PNC cooperated fully with the U.S. Trustee's office and in doing so, provided full and fair remediation to any customer who conceivably could have been impacted."
