Wisconsin Department of Financial Institutions Finalizes Investigation of Mr. Cooper’s Misconduct and Operational Weaknesses
MADISON, Wis. – The Wisconsin Department 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, the agency announced today.
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.
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. Additionally, state regulators addressed servicing issues impacting borrowers in bankruptcy in coordination with the United States Trustee Program, a component within the Department of Justice.
The coordinated government agreements assessed four main penalties and organization changes:
- Refunds and other redress approaching $90 million to more than 115,000 consumers in 53 states and jurisdictions;
- Civil monetary penalties and government reimbursement in excess of $6.5 million;
- Enhanced servicing standards for three years; and
- Additional regulatory oversight and corporate disclosure going forward to ensure the company maintains adequate risk and compliance programs.
In Wisconsin, the order includes redress of $864,864 for 632 consumers and civil penalties totaling $750,000 to be distributed evenly among participating states and jurisdictions.
“We are pleased to have reached today’s agreement and be able to offer some monetary relief to Wisconsin borrowers harmed by Nationstar,” said DFI Secretary Kathy Blumenfeld. “The enhanced servicing requirements set forth in today’s agreement will help to ensure that current Wisconsin borrowers are provided with improved customer service and appropriate processing of mortgage payments. Moving forward with this agreement is one more step taken toward strengthening Wisconsin’s financial future and protecting our consumers.”
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 settlement agreement and consent order may be found at www.csbs.org/2020-settlement-agreement-and-consent-order.