A state attorney general says the company, now known as Mr. Cooper, violated a state law meant to prevent unnecessary foreclosures
.jpg)
The Massachusetts attorney general has announced that Nationstar Mortgage, now known as Mr. Cooper, will pay millions of dollars to settle claims that it placed the state’s homeowners at risk of foreclosure through “unfair and deceptive practices.”
On Tuesday, Massachusetts Attorney General Maura Healey announced that her office had secured “millions of dollars in relief” for Massachusetts Nationstar customers. The exact amount was not specified, but will include $500,000 in restitution to some foreclosed-on homeowners. As part of the settlement, the company will provide direct payments and loan modifications to hundreds of homeowners in the state. It will also update its practice and be subject to oversight from the AG’s office.
“In Massachusetts, mortgage servicers are required by law to help prevent unnecessary foreclosures and keep families in their homes,” Healey said. “Nationstar failed to stop foreclosures, and this settlement gives homeowners in the hardest-hit areas of Massachusetts a chance to stay in their homes. It also sends a clear message that we will hold accountable companies that are not following the law.”
The AG’s office alleged that Nationstar had violated a 2012 state law that protects certain borrowers from foreclosure. The law requires creditors to make a good-faith effort to avoid foreclosure for borrowers whose mortgages have “unfair subprime loan terms,” the AG’s office said.
The AG accused Nationstar of offering “unfair and deceptive short-term, interest-only loan modifications” that didn’t consider the borrower’s ability to repay the mortgage over the life of the modified loans. After a year or two, according to the AG’s office, the monthly payments on those modified loans ballooned to an amount higher than that on which the borrower originally defaulted. Nationstar also allegedly failed to provide a fair opportunity for modification reviews; even when borrowers provided the necessary forms, the company allegedly failed to log, track and process them as required by law.
“Instead, borrowers faced massive delays, repetitive requests for modification paperwork and were often denied loan modifications on the grounds that they had failed to submit proper documentation, which had indeed been submitted,” the AG’s office said.
Between 500 and 600 borrowers in the state will be eligible for loan modification under the settlement, and more than 100 foreclosed-on borrowers will be eligible for restitution, according to the AG’s office.
Related stories:
Nationstar reaches $9.2 million settlement with California
Mr. Cooper announces home-loan-linked credit card offering
On Tuesday, Massachusetts Attorney General Maura Healey announced that her office had secured “millions of dollars in relief” for Massachusetts Nationstar customers. The exact amount was not specified, but will include $500,000 in restitution to some foreclosed-on homeowners. As part of the settlement, the company will provide direct payments and loan modifications to hundreds of homeowners in the state. It will also update its practice and be subject to oversight from the AG’s office.
“In Massachusetts, mortgage servicers are required by law to help prevent unnecessary foreclosures and keep families in their homes,” Healey said. “Nationstar failed to stop foreclosures, and this settlement gives homeowners in the hardest-hit areas of Massachusetts a chance to stay in their homes. It also sends a clear message that we will hold accountable companies that are not following the law.”
The AG’s office alleged that Nationstar had violated a 2012 state law that protects certain borrowers from foreclosure. The law requires creditors to make a good-faith effort to avoid foreclosure for borrowers whose mortgages have “unfair subprime loan terms,” the AG’s office said.
The AG accused Nationstar of offering “unfair and deceptive short-term, interest-only loan modifications” that didn’t consider the borrower’s ability to repay the mortgage over the life of the modified loans. After a year or two, according to the AG’s office, the monthly payments on those modified loans ballooned to an amount higher than that on which the borrower originally defaulted. Nationstar also allegedly failed to provide a fair opportunity for modification reviews; even when borrowers provided the necessary forms, the company allegedly failed to log, track and process them as required by law.
“Instead, borrowers faced massive delays, repetitive requests for modification paperwork and were often denied loan modifications on the grounds that they had failed to submit proper documentation, which had indeed been submitted,” the AG’s office said.
Between 500 and 600 borrowers in the state will be eligible for loan modification under the settlement, and more than 100 foreclosed-on borrowers will be eligible for restitution, according to the AG’s office.
Related stories:
Nationstar reaches $9.2 million settlement with California
Mr. Cooper announces home-loan-linked credit card offering
