Mr. Cooper, two other repairers settle past claims with government
On the same day Cooper announced a settlement with state and federal authorities over his service practices, the Dallas-based company and two other lenders entered into separate agreements with the Department of Justice regarding bankrupt borrowers.
Mr. Cooper has agreed to pay more than $ 91 million to consumers and state and federal regulators to address allegations of misconduct in his service practices dating back to 2011.
The fees cover problems related to loan modifications, foreclosures and cancellations of mortgage insurance policies. The complaints were first raised in a pair of reviews conducted by a consortium of state regulators in 2014, when the Dallas-based company was operating as Nationstar. In 2018, the repairer was acquired by WMIH, who renamed him Mr. Cooper.
“Mortgage agents are responsible for handling important financial transactions for millions of Americans, including distressed homeowners,” said Kathy Kraninger, director of the Consumer Financial Protection Bureau, in a press release. “Nationstar shattered that trust by engaging in unfair and deceptive practices prohibited by the Consumer Financial Protection Act 2010, as well as violations of the Real Estate Settlement Procedures Act and Privacy Act. of the owners. “
By agreeing to the settlement, Mr. Cooper did not admit any wrongdoing or violation of applicable laws.
“When these issues were identified several years ago, we immediately reimbursed our affected customers and invested in process improvements to prevent them from recurring,” said Jay Bray, chief executive officer of Mr. Cooper. , in a press release.
The charges were laid by the CFPB, attorneys general for all 50 states, and mortgage regulators for 48 states plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The only state mortgage regulators not listed were Colorado and New York.
Empire State Mortgage Regulators participated in the 2014 Multi-State Establishment and Management Reviews which led to the complaint against Nationstar and settled with the company separately in 2018. Colorado’s regulatory and oversight regime differs from many other states and mortgage regulators were not involved in this matter, a spokesperson said.
“Multi-state surveillance and enforcement measures like today’s exemplify the power of states working together to regulate financial services, protect consumers and local economies,” said John Ryan, President and Chief Executive Officer from the leadership of the Conference of State Bank Supervisors. “States working together and with their federal counterparts are the future of industry oversight. “
The banking watchdog group said it worked with the American Association of Residential Mortgage Regulators on the state-implemented part of the case.
According to the regulations, $ 62.6 million in consumer remedies were completed before the deal. This included payments to consumers affected by issues related to the company’s loan modification, private mortgage insurance cancellation, escrow and loss mitigation practices. This amount also included the violations cited during the origin review, such as the imposition of unauthorized charges.
An additional $ 15.6 million will be paid to consumers affected by Nationstar’s mod lending, escrow and foreclosure practices. An additional $ 6.4 million will go to borrowers who were harmed by the department’s asset transfer and preservation practices, which involved loans transferred to Nationstar between 2011 and 2017. A portion of this $ 6.4 million will cover properties declared vacant by mistake, for which the company has the locks changed.
Mr. Cooper will also pay $ 1.5 million in a CFPB consent judgment, $ 1.2 million to states for an administrative penalty and costs, plus $ 3.9 million in attorney fees.
In addition, the Office of the Trustees of the United States Department of Justice, which oversees the administration of bankruptcy and private trustee matters, has entered into its own agreements with Mr. Cooper, the US Bank and the PNC Bank regarding the non-compliance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure, which affected more than 60,000 accounts in the three companies, dating back to 2011.
These failures resulted in payment request errors, inaccurate, missing and untimely bankruptcy filings and delayed receivership declarations, the Justice Department said.
“Failure by mortgage agents to meet these requirements compromises the integrity of the bankruptcy system and the ability of homeowners to make a fresh start,” said Cliff White, director of the trustee program for the US Department of Justice. United.
For Cooper, the deal commemorates more than $ 40 million in payments made by the company to affected borrowers. The US trustee’s deal includes the $ 22.84 million in reparations to bankrupt borrowers in the CFPB settlement. Mr. Cooper will pay an additional $ 17.84 million for specific bankruptcy conduct in the US Trustee case.
The U.S. bank has provided or will provide $ 29 million in credits and repayments, the Justice Department said. The bank also waived around $ 43 million in fees and charges on its entire mortgage service portfolio, including for bankrupt borrowers.
The U.S. bank said the issues were first identified in 2014 and the bank took corrective action the following year, with some customers receiving corrective action.
“Our agreement with US Trustee includes additional corrective measures for clients, which we expect to complete in the coming months,” US Bank said in a statement. “We take our responsibility to our clients seriously and have worked expeditiously to ensure that our bankruptcy handling is carried out fairly and in a compliant manner. “
The Justice Department also issued a letter acknowledging that the PNC had provided nearly $ 5 million in credits and repayments, along with additional corrective measures in the form of lien releases and debt cancellations.
“We are delighted to leave this matter behind and appreciate the assistance of the Office of the US Trustee as we work to resolve it,” said a statement from PNC Bank. “As stated in the acknowledgment, PNC has fully cooperated with the Office of the United States Trustee and in doing so has provided full and fair redress to any customer who may have been affected.”