BALTIMORE, MD—The Maryland Department of Labor’s Office of the Commissioner of Financial Regulation on Monday announced that it had concluded a multi-year investigation of one of the nation’s top ten largest mortgage servicing companies, Nationstar Mortgage LLC, which does business as Mr. Cooper.
After a nationwide investigation revealed multiple violations of law and procedural deficiencies, Nationstar has cooperated and agreed to a national settlement requiring restitution of nearly $90 million to more than 115,000 mortgage borrowers across the country. In Maryland, over 1,500 consumers will receive up to approximately $2.6 million in remediation.
“I am very proud of our state’s Office of the Commissioner of Financial Regulation for leading negotiation efforts on behalf of all participating state mortgage regulators during this multi-year investigation and advocating for the rights of consumers across the country,” said Labor Secretary Tiffany P. Robinson. “During the COVID-19 pandemic, this office has continued to work diligently to ensure that consumer protection laws are enforced and Marylanders are connected with the many financial relief resources available to help get through these difficult economic times.”
In addition to Maryland’s Office of the Commissioner of Financial Regulation, this national settlement includes 52 other mortgage regulators from states and jurisdictions, 51 State Attorney General’s Offices, and the federal Consumer Financial Protection Bureau (CFPB). Other federal agencies providing technical support and assistance include the Department of the Treasury’s Special Inspector General for the Troubled Asset Relief Program and the Department of Justice’s United States Trustee Program.
“This settlement demonstrates our Office’s commitment to collaborating with other state mortgage regulators to hold large, national mortgage servicing companies accountable for their violations of law. As in this case, when appropriate, we will work with mortgage servicing companies to remediate consumer harm and improve their operations to ensure that future activities are carried out responsibly and in compliance with all consumer protections,” said Maryland’s Commissioner of Financial Regulation Antonio P. Salazar. “Nationstar has made representations to my office and other state regulators that it intends to be a leader in compliance and risk management going forward and that approach will benefit consumers and provide a significant benchmark for other national loan servicing companies.”
The settlement also establishes strict standards of practice addressing wrongful foreclosures, fees and insurance, loan modifications, borrower bankruptcy, customer complaints, account transfers, and oversight over third-party vendors, such as law firms and property preservation companies. The standards also cover loans subject to the Servicemembers Civil Relief Act and require certain accommodations for borrowers with limited English proficiency. Nationstar will also pay civil penalties and government cost reimbursements exceeding $6.5 million nationally. Of this, Maryland will receive nearly $260,000.
Nationstar has agreed to enhanced regulatory oversight and disclosure to ensure the company maintains adequate risk and compliance programs. State regulators retain jurisdiction over the settlement and will continue supervising the ongoing licensing and compliance obligations of Nationstar. Should additional violations occur, or if issues are not addressed sufficiently, the company remains subject to further regulatory actions.
Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement.
To view the settlement agreement and consent order, please visit the CSBS’s website at www.csbs.org/2020-settlement-agreement-and-consent-order. To learn more about the Office of the Commissioner of Financial Regulation, please visit labor.maryland.gov/finance.