Nationstar to Pay $110 Million to Settle Borrower Claims
(Bloomberg) -- The mortgage-loan servicer Nationstar Mortgage LLC agreed to pay roughly $110 million to settle complaints of deceptive practices brought by the U.S. government and a coalition of all 50 state attorneys general.
In lawsuits filed in federal court in Washington on Monday, the Consumer Financial Protection Bureau and the states said Nationstar, owned by Mr. Cooper Group Inc., failed to properly oversee third-party vendors or respond to borrowers’ complaints, among other offenses. Mortgage servicers handle billing and collection on behalf of investors who own the loans and supervise foreclosures if borrowers don’t pay.
The CFPB said in a press release that Nationstar had agreed to pay about $85 million to tens of thousands of harmed borrowers, as well as more than $6 million in fees and penalties.
In a separate statement on Monday, the U.S. Justice Department said Nationstar and two other mortgage servicers, U.S. Bank National Association and PNC Bank, had agreed to pay more than $74 million combined to redress “servicing errors” that hurt borrowers in bankruptcy. Of that total, $40 million would come from Nationstar, though $22.8 million of that amount was also covered in the CFPB settlement. That would bring Nationstar’s total for all the settlements to almost $110 million.
Nationstar said in a statement that its settlements were based on “loan-servicing practices” that the company used between 2010 and 2015 and has since discontinued. All but $28.6 million of its settlements announced on Monday is restitution already paid to consumers, Nationstar said.
“Reviews demonstrated that management and the board had taken positive steps to address these issues, that we had made significant governance and operational improvements, and that we had strengthened internal control systems to ensure that they were appropriate for our size and scope of our operations,” the company said.
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