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Mortgage Servicer Agrees to Pay over $86 Million to Settle Suits by CFPB, Attorneys General

  • The Consumer Financial Protection Bureau (“CFPB”), a multistate group of 51 AGs, and 53 state bank regulators reached a settlement with Nationstar Mortgage, LLC, d/b/a Mr. Cooper (“Nationstar”) to resolve allegations that it improperly serviced thousands of mortgage loans in violation of the Dodd–Frank Wall Street Reform and Consumer Protection Act, Homeowners Protection Act, the Real Estate Settlement Procedures Act and its implementing regulations, Regulation X, and the respective states’ consumer protection laws.
  • The CFPB complaint alleged that, among other things, Nationstar failed to identify and honor borrowers’ loan modification agreements, foreclosed on borrowers to whom it had promised foreclosure holds, improperly increased borrowers’ monthly loan payments despite modifications to their accounts, and failed to properly manage borrowers’ escrow accounts.
  • Under the terms of the CFPB stipulated judgment and the concurrently filed proposed consent judgment with the states, Nationstar will pay approximately $86 million in consumer recoveries, fees, and penalties, including a $1.5 million civil money penalty to the CFPB. The CFPB settlement also requires Nationstar to create a comprehensive mortgage servicing compliance plan, including revised policies and procedures regarding error resolution, management of escrow accounts, and service transfers.