Consumer watchdog's probe of repeat offender reveals further wrongdoings
The Consumer Financial Protection Bureau (CFPB) is taking Freedom Mortgage to court – again – for allegedly providing false data on its mortgage operations and breaching a 2019 consent order.
The Florida-based nonbank allegedly submitted error-laden mortgage loan data, violating the Home Mortgage Disclosure Act (HMDA) and a 2019 consent order. This comes just two months after the CFPB fined Freedom $1.75 million for illegal kickbacks related to mortgage loan referrals.
In 2020, the company reported HMDA data on over 700,000 mortgage loan applications and originated nearly 400,000 HMDA-reportable loans, amounting to almost $100 billion.
Read more: CFPB takes action against mortgage lender for illegal activities
The CFPB’s initial review of 159 files in Freedom’s 2020 submission uncovered 51 errors, leading to a resubmission where Freedom corrected errors in 35 different required HMDA data fields. These errors affected over 174,000 data entries, nearly 20% of Freedom’s mortgage loan applications.
Additionally, the CFPB found that Freedom had intentionally misreported HMDA data about applicants’ race and ethnicity in 2019, leading to a $1.75 million penalty and a mandate to improve its compliance management system and avoid future HMDA violations.
The current lawsuit seeks to halt Freedom’s alleged unlawful conduct and impose a civil money penalty, which will be deposited in the CFPB’s victims relief fund.
In a statement, CFPB director Rohit Chopra said, “The CFPB is suing Freedom Mortgage for violating a law enforcement order and for providing false data on its mortgage operations. The CFPB will continue to focus on ending the cycle of misconduct by repeat offenders in the financial industry.”
Freedom Mortgage hasn’t replied to a request for comment yet.
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