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Department of Consumer Affairs Joins with State and Federal Partners in Settling Investigation of Nationstar Mortgage, LLC

Wed, 12/09/2020

COLUMBIA, S.C. – The South Carolina Department of Consumer Affairs (SCDCA), is announcing a settlement with Nationstar Mortgage LLC, d/b/a Mr. Cooper, providing $850,000 for 1,082 South Carolina borrowers. A joint effort with the South Carolina State Board of Financial Institutions Consumer Finance Division (BOFI-CFD), and in coordination with state and federal government partners, the settlement closes a multiyear investigation of Nationstar Mortgage, one of the largest mortgage servicers in the nation. 

Significant consumer relief and penalties were imposed on the company for multiple residential mortgage origination and servicing-related violations of state and federal laws identified through Consumer Financial Protection Bureau and state regulator examinations that began in 2014. Violations include unlawful mortgage origination fees and charges; missed tax payments from borrower escrow accounts; failure to stop private mortgage insurance when conditions were met; mishandling of loan modifications and servicing transfers; and wrongful foreclosures. These violations affected more than 115,000 consumers nationwide.

“We are thankful for the partnership of the 52 other state regulators, 51 state attorneys general and our federal counterparts participating in the investigation,” said SCDCA Administrator and Consumer Advocate Carri Grube Lybarker. “Consumers don’t have a choice of who services their mortgage. We believe the leveraging of resources in this matter led to a well-rounded resolution that provides relief to South Carolinians and will improve operations and customer service at the company.”

The four main penalties and organization changes include:

1) Refunds and other relief approaching $90 million to more than 115,000 consumers in 53 states and jurisdictions

2) Civil monetary penalties and government reimbursement in excess of $6.5 million

3) Enhanced servicing standards for three years

4) Additional regulatory oversight and corporate disclosures going forward to ensure the company maintains adequate risk and compliance programs

A settlement administrator will contact affected consumers in early 2021. Consumers with complaints against their mortgage servicer can contact the SC Board of Financial Institutions at www.consumerfinance.sc.gov or by calling (803) 734-2020. Mortgage broker complaints can be filed with SCDCA by visiting www.consumer.sc.gov or call (800) 922-1594.

About SCDCA
The South Carolina Department of Consumer Affairs aims to protect consumers from inequities in the marketplace through advocacy, complaint mediation, enforcement and education. To file a complaint or get information on consumer issues, visit www.consumer.sc.gov or call toll-free in SC: 1 (800) 922-1594.