HousingWireHousingWire
Mortgage servicer Nationstar, doing business as Mr. Cooper, is expected to settle a lawsuit with electronic payment processing vendor ACI Payments that is related to alleged damages from unauthorized mortgage payments imposed on Mr. Cooper’s customers three years ago.
The settlement notice was filed Aug. 30 in a U.S. district court in Texas. Mr. Cooper notified the court that “the parties have reached an agreement in principle to settle the litigated claims in this case in full.”
Mr. Cooper also requested that all deadlines remain pending until the formal settlement is completed, which is expected to happen by Sept. 30. After that, the plaintiff will file for a voluntary dismissal of the case.
A spokesperson for Mr. Cooper said the company “won’t be commenting beyond what is available in the public filings.” A representative at ACI Payments did not respond to HousingWire‘s request for comment.
Mr. Cooper filed the lawsuit against ACI Payments in September 2023, alleging breach of contract, misappropriation of confidential information and ordinary negligence, among other accusations.
According to Mr. Cooper, ACI used nonpublic information from its customers to conduct tests in April 2021. It allegedly sent instructions for banks to initiate ACH (automatic clearinghouse) debits for multiple mortgage payments without the servicer’s knowledge or authorization. These customers paid overdraft/insufficient funds fees or faced temporary account freezes.
Mr. Cooper alleges that the incident made media headlines nationwide, damaging its reputation. In addition, it faced legal fees due to 10 class-action lawsuits and at least two individual lawsuits.
Mr. Cooper’s lawsuit was filed three months after ACI Worldwide and its subsidiary, ACI Payments, agreed to pay a $25 million civil penalty for illegally processing $2.3 billion from nearly 500,000 homeowners serviced by Mr. Cooper, per a Consumer Financial Protection Bureau (CFPB) consent order. ACI did not admit any wrongdoing.
According to the CFPB, instead of using de-identified or dummy data, ACI used actual consumer data from Mr. Cooper’s clients, such as names and bank account details, to initiate 1.4 million ACH withdrawals. About 7,300 borrowers had their available balances reduced by more than $10,000 overnight, the CFPB said.
ACI also settled a consumer class-action suit arising from the error in May 2023.
