COLUMBUS (WCMH) – Attorney General Dave Yost agreed Monday to an $86.3 million settlement with Nationstar, the country’s fourth largest mortgage servicer.
According to reports, Nationstar was accused of mishandling home loans. The case involved 50 states, plus the District of Columbia, including federal and state agencies.
In Ohio, the settlement affects 1,862 mortgage loans, with borrowers receiving more than $2 million in relief funds.
“When you make mistakes and it costs you money, that’s bad record-keeping,” Yost said. “When your mistakes cost innocent Ohio homeowners money, that’s bad business — and you’re going to get a court date with a lawsuit.”
The lawsuit alleged other unlawful acts and practices by Nationstar, includes:
- Failing to properly oversee and implement the transfer of mortgage loans
- Failing to appropriately identify loans with pending loan modification applications when a loan was being transferred to Nationstar for servicing
- Failing to timely and accurately apply payments made by certain borrowers
- Threatening foreclosure and conveying conflicting messages to certain borrowers engaged in loss mitigation
- Failing to properly process borrowers’ applications for loan modifications
- Failing to properly review and respond to borrower complaints
- Failing to make timely escrow disbursements, including the failure to timely remit property tax payments
It also includes failing to timely terminate borrowers’ private mortgage insurance; collecting monthly modified payment amounts on certain loans where the amounts charged for principal and interest exceed the principal and interest amount contained in the trial plan agreement.
According to the Consent Judgment, Nationstar is required to follow a detailed set of rules or “servicing standards” in how it handles certain mortgage loans. These servicing standards are more comprehensive than existing law and will be in place for three years starting on Jan. 1, 2021.