CFPB and State Attorneys General Settle with Nationstar, aka Mr. Cooper, accused of unfair and deceptive practices

Nationstar MortgageOn December 7, 2020, the Consumer Financial Protection Bureau (Bureau) filed a complaint and proposed stipulated judgment and order against Nationstar Mortgage, LLC, which does business as Mr. Cooper (Nationstar). The Bureau alleges that Nationstar violated multiple Federal consumer financial laws, causing substantial harm to the borrowers whose mortgage loans it serviced, including distressed homeowners. Nationstar is one of the nation’s largest mortgage servicers and the largest non-bank mortgage servicer in the United States. The proposed judgment and order, which the court entered on December 8, 2020, requires Nationstar to pay approximately $73 million in redress to more than 40,000 harmed borrowers. It also requires Nationstar to pay a $1.5 million civil penalty to the Bureau. Attorneys general from all 50 states and the District of Columbia and bank regulators from 53 jurisdictions covering 48 states and Puerto Rico, the Virgin Islands, and the District of Columbia settled with Nationstar the same day and their settlements are reflected in separate actions, concurrently filed in the United States District Court for the District of Columbia. The orders in the Bureau’s and the States’ actions have yielded nearly $85 million in recoveries for consumers to date and over $6 million more in fees and penalties. They are also part of a larger government effort, which also includes assistance from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the United States Trustee Program, to address Nationstar’s alleged unlawful mortgage loan servicing practices.


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To read the complaint and Stipulated Judgment and Order click below:

MUSINGS BY DIANE:

Nationstar

Nationstar, aka Mr. Cooper, is one of the largest mortgage servicers in the country.  Why they find it necessary to defraud their customers is beyond me.  Read the complaint filed by the Consumer Financial Protection Bureau, which mirrors the complaints filed by all the State Attorney Generals.  According to the complaint Nationstar : (1) failed to identify thousands of loans with existing in-flight modifications and, as a result, failed to recognize some transferred loans with pending loss mitigation applications or trial modification plans, or failed to identify and honor other borrowers’ loan modification agreements; (2) foreclosed on borrowers to whom it had promised foreclosure holds while they applied for loss mitigation relief; (3) improperly increased
borrowers’ permanent, modified monthly loan payments; (4) failed to timely disburse borrowers’  tax payments from their escrow accounts; (5) failed to properly conduct escrow analyses for borrowers during their Chapter 13 bankruptcy proceedings; and (6) failed to timely remove private mortgage insurance from borrowers’ accounts. Each of these acts or failures violated the law. 

By now you are very tired of me asking “why”.  Why does a wealthy and powerful company find it necessary to prey on the least able to protect themselves?  Do you think Nationstar is going to pull millions of dollars out of their pockets to pay these fees and penalties?  Think about it!

– Diane L. Drain
528 words|2.8 min read|Categories: Real Estate|By |Published On: January 1st, 2021|Last Updated: July 30th, 2021|

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Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

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