ARKANSAS JOINS $15.5 MILLION SETTLEMENT WITH MORTGAGE SERVICER

The following information was released by the Arkansas Securities Department:

Company wrongly charged customers force-placed insurance

LITTLE ROCK, Ark. (August 12, 2026) Arkansas and 48 state financial agencies have reached a $15.5 million settlement with one of the nation's largest mortgage servicers for improperly imposing "force-placed" insurance costs on borrowers who already had active homeowners' insurance policies.

Under the terms of the settlement, Fort Washington, Penn., based NewRez LLC (NMLS ID 3013), will pay a total of $15.5 million. The company worked with state regulators to self-identify and proactively remediate $4.5 million to the impacted borrowers, and it will pay an additional $11 million for costs and penalties. NewRez will be required to implement and conduct enhanced monitoring for loans that have force-placed insurance. The company also must implement other actions to strengthen controls.

The settlement resolves an issue found in a multistate examination of NewRez that found the company had improperly imposed "force-placed" insurance on more than 4,200 borrowers nationwide with active homeowners' insurance policies, causing consumer harm in the sum of $4.5 million.

"This settlement holds NewRez accountable for harm done to Arkansas homeowners and requires a change in behavior," said Securities Commissioner Susannah T. Marshall. As insurance prices continue to rise, servicers must implement effective procedures to ensure borrowers are not subjected to unnecessary or additional fees."

Force-placed insurance is often required when a homeowner's policy is cancelled, delinquent, or is insufficient in coverage and the borrower has failed to secure replacement coverage. If necessary, the lender, bank, or loan servicer may force the replacement coverage, which allows the lender to protect its financial interest in the property. This practice usually is significantly more costly than if a consumer secures their own insurance policy.

The District of Columbia led the enforcement team, with the assistance of Arkansas, Iowa, Massachusetts, and Montana. NewRez cooperated with the states in the settlement.

Arkansas residents who have questions about the enforcement action should contact the Arkansas Securities Department at 800-981-4429 or via the website at www.securities.arkansas.gov. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in Arkansas, and they may also view past enforcement actions.

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About the Arkansas Securities DepartmentThe Arkansas Securities Department provides responsible oversight of securities and financial industries in Arkansas while simultaneously working to protect consumers and educate investors. In this capacity, the Department regulates a variety of financial services, products, and professionals. Established in 1959, the Department's statutory duties have evolved over the years. Today, the Department is responsible for oversight of the securities industry, non-depository mortgage lending industry, money services industry, state-chartered credit union industry, and state-chartered savings and loan industry in Arkansas.

About the Arkansas Department of CommerceThe mission of the Arkansas Department of Commerce is to champion the economic health of every Arkansas citizen and business. Its divisions and regulatory boards include the Waterways Commission, Economic Development Commission, Division of Aeronautics, Workforce Connections, Division of Reemployment, State Bank Department, Insurance Department, Securities Department, and Development Finance Authority.