Arizona A.G.: 51 Attorneys General Reach $86.3 Million Settlement With Mortgage Servicer Nationstar
Attorney General
The consent judgment resolves allegations that Nationstar, which does business as "
The consent judgment, filed today in the
In
The consent judgment also requires Nationstar to follow a detailed set of rules or "servicing standards" in how it handles certain mortgage loans. These servicing standards are more comprehensive than existing law and will be in place for three years starting on
The settlement was signed by attorneys general from all 50 states and the
In 2012, Nationstar began purchasing mortgage servicing portfolios from competitors and grew quickly into the nation's largest non-bank servicer. As loan data was transferred to Nationstar, borrowers who had sought assistance with payments and loan modifications sometimes fell through the cracks, the multistate lawsuit alleged. In
Other borrowers suffered damages when Nationstar failed to oversee third-party vendors hired to inspect and maintain properties owned by delinquent borrowers and improperly changed locks on their homes, the lawsuit alleged. In
The lawsuit alleged other unlawful acts and practices by Nationstar, including:
- Failing to properly oversee and implement the transfer of mortgage loans;
- Failing to appropriately identify loans with pending loan modification applications when a loan was being transferred to Nationstar for servicing;
- Failing to timely and accurately apply payments made by certain borrowers;
- Threatening foreclosure and conveying conflicting messages to certain borrowers engaged in loss mitigation;
- Failing to properly process borrowers' applications for loan modifications;
- Failing to properly review and respond to borrower complaints;
- Failing to make timely escrow disbursements, including the failure to timely remit property tax payments;
- Failing to timely terminate borrowers' private mortgage insurance;
- Collecting monthly modified payment amounts on certain loans where the amounts charged for principal and interest exceed the principal and interest amount contained in the trial plan agreement.
Today's agreement also requires Nationstar to conduct audits and provide audit results to a committee of states to ensure compliance with the settlement.
This case for
What do
A settlement administrator will send a claim form to eligible borrowers in 2021. Nationstar has already provided some of the relief outlined in the settlement during the course of the states' investigation.
Copy of the Complaint and Consent Judgmentcan be accessed through this link: https://www.azag.gov/press-release/51-attorneys-general-reach-863-million-settlement-mortgage-servicer-nationstar
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