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Thursday, November 21, 2024

DCCA: Division of Financial Institutions Finalizes Investigation of Mr. Cooper’s Misconduct and Operational Weakness

Dfi

Department of Commerce and Consumer Affairs issued the following announcement on Dec. 7.

The state Department of Commerce and Consumer Affairs Division of Financial Institutions (DFI), in  coordination with state and federal government partners, closed a  multiyear investigation of Nationstar Mortgage LLC, d/b/a Mr. Cooper,  one of the largest mortgage servicers in the nation.

Significant consumer remediation and penalties were imposed on  the company for multiple residential mortgage origination and  servicing-related violations of state and federal laws, including  impermissible mortgage origination fees and charges; missed tax payments  from borrower escrow accounts; failure to terminate 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. 

In taking action, DFI joined with 52 other state regulators, 51  state attorneys general and the federal Consumer Financial Protection  Bureau. The special inspector general for the Troubled  Asset Relief Program and her staff provided technical support during the  examination resolution process. 

The coordinated government agreements assessed four main penalties and organization changes:

1) Refunds and other redress 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 disclosure  going forward to ensure the company maintains adequate risk and  compliance programs 

In Hawaii, the order includes redress of $202,005 for 166  consumers and civil penalties totaling $750,000 to be distributed among  participating states and jurisdictions.

“This settlement reflects the importance of working together  with other states and the CFPB on the large scope examination areas, to  improve the safety and soundness of Mr. Cooper and protect consumers,”  said Commissioner of Financial Institutions Iris Ikeda. “One of the more  important areas of compliance included ordering Mr. Cooper to make  changes to its systems to unify its mortgage servicing systems in order  to deliver consistent service to consumers,” continued Commissioner  Ikeda.

Today’s final order resolves all outstanding issues flowing  from coordinated CFPB and state regulator examinations that began in  2014. State regulators retain jurisdiction over this order and nothing  in the agreement impacts state regulators from supervising the ongoing  licensing and compliance obligations of Mr. Cooper. Should additional  violations occur, or if issues are not addressed sufficiently, the  company remains subject to further regulatory actions.  

The nationwide settlement agreement and consent order may be found at www.csbs.org/2020-settlement-agreement-and-consent-order.

Original source can be found here.

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