HousingWireHousingWire
Nationstar Mortgage — currently doing business as Mr. Cooper — has agreed to settle a lawsuit which alleges that the company violated mortgage servicing laws and forced borrowers into foreclosure.
Attorneys general and mortgage regulators in 50 states, as well the District of Columbia, agreed to a settlement that requires Mr. Cooper to provide $5.8 million in payments to eligible borrowers.
Two groups of homeowners — a service transfer population and a property preservation population — are eligible for relief under the settlement. Service transfer borrowers moved their loans to Mr. Cooper for servicing between February 2011 and December 2017. Property preservation borrowers were subject to Mr. Cooper’s property inspections between June 2011 and December 2017.
Service transfer borrowers faced significant turmoil once their loans were transferred in bulk to Mr. Cooper for servicing. According to the lawsuit, these loans became 30 days delinquent within 90 days of the transfer, eventually causing several foreclosures among homeowners.
Property preservation owners alleged that Mr. Cooper falsely flagged certain properties as vacant and changed the locks to prevent entry. The lawsuit claims that borrowers may have requested access to the property within 30 days of the lock change, often to no avail. Other properties also had subsequent inspections within 90 days of the lock change to confirm they were occupied.
There is a public website to help borrowers who may be eligible for relief under the settlement. Affected homeowners do not have to show financial harm to receive relief, according to the website.
Eligible borrowers should have received a packet indicating their eligibility in December 2024. And borrowers may still join other lawsuits, although any subsequent payments may be reduced. Eligible beneficiaries have until March 3, 2025, to file a claim.
This isn’t the only lawsuit that Mr. Cooper has faced in recent years. The company is currently involved in another class-action lawsuit after a major data breach in late 2023 potentially impacted millions of borrowers.
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