Multiple residential mortgage origination and servicing-related violations result in nearly $89 million in remediation for more than 115,000 accounts
Olympia, Wash., December 7, 2020 – The Washington State Department of Financial Institutions (DFI), in coordination with state and federal government partners, closed a multiyear investigation of Nationstar Mortgage LLC, d/b/a Mr. Cooper, one of the largest mortgage servicers in the nation, the agency announced today.
Significant consumer remediation and penalties were imposed on the company for multiple residential mortgage origination and servicing-related violations of state and federal laws, including impermissible mortgage origination fees and charges; missed tax payments from borrower escrow accounts; failure to terminate private mortgage insurance when conditions were met; mishandling of loan modifications and servicing transfers; and wrongful foreclosures.
These violations affected more than 115,000 consumers nationwide.
In taking action, DFI joined with 52 other state regulators, 51 state attorneys general and the federal Consumer Financial Protection Bureau.
The coordinated government agreements assessed four main penalties and organization changes:
- Refunds and other redress approaching $90 million to more than 115,000 consumers in 53 states and jurisdictions;
- Civil monetary penalties and government reimbursement in excess of $6.5 million;
- Enhanced servicing standards for three years; and
- Additional regulatory oversight and corporate disclosure going forward to ensure the company maintains adequate risk and compliance programs.
In Washington State, the order includes redress of $2,117,231 for 4,766 consumers and civil penalties totaling $750,000 to be distributed evenly among participating states and jurisdictions.
“Mortgage regulations provide critical protections for Washington homeowners,” DFI Director Charlie Clark noted. “It is critical that all of our mortgage licensees, including some of the largest companies, operate in accordance with the law. Today’s action demonstrates that regulators around the country can work together to ensure that large companies like Nationstar Mortgage LLC do not take advantage of struggling homeowners.”
“Buying a home is the single largest investment many Washingtonians will ever make,” Washington Attorney General Bob Ferguson said. “Homeowners rely on mortgage companies to service their loans accurately and timely. We will continue fighting for Washingtonians who place significant trust in mortgage companies to handle their mortgages lawfully and fairly.”
Today’s final order resolves all outstanding issues flowing from coordinated CFPB and state regulator examinations that began in 2014. State regulators retain jurisdiction over this order and nothing in the agreement impacts state regulators from supervising the ongoing licensing and compliance obligations of Nationstar Mortgage LLC. Should additional violations occur, or if issues are not addressed sufficiently, the company remains subject to further regulatory actions.
The consent order and settlement summary can be found here:
About DFI ▪ www.dfi.wa.gov ▪ 360-902-8700 ▪ 877-RINGDFI (746-4334)
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: www.twitter.com/FinEd4All ■ www.twitter.com/DFIConsumers ■ www.finlit.blogspot.com ■ www.youtube.com/user/WADFI ■ www.homeownership.wa.gov
About the Division of Consumer Services ▪ www.dfi.wa.gov/cs ▪ 360-902-8703 ▪ 877-746-4334, x 8703 The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as “payday lenders.” The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.