Nationstar Mortgage LLC

Nationstar Mortgage to Pay $1.75 Million Penalty for HMDA Violations


On March 15, 2017, the Consumer Financial Protection Bureau (“CFPB“) ordered Nationstar Mortgage LLC (“Nationstar“) to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (“HMDA“) by consistently failing to accurately report data about mortgage transactions between 2012 through 2014. The $1.75 million civil penalty is the largest HMDA penalty imposed by the CFPB to date. The CFPB found that (1) Nationstar’s HMDA compliance systems were flawed and generated mortgage lending data with significant, preventable errors; (2) Nationstar failed to maintain detailed HMDA data collection and validation procedures and failed to implement adequate compliance procedures; and (3) Nationstar failed to consistently define data among its various lines of business. In addition to the civil penalty, the CFPB ordered Nationstar to develop and implement an effective compliance management system and to review, correct and make available its corrected HMDA data from 2012-2014. Release. Full Order.

Investor Files Suit Against Nationstar Over Mortgage Auctions

On March 7, KIRP, LLC sued Texas-based mortgage servicer Nationstar Mortgage LLC in the Supreme Court of the State of New York in connection with Nationstar’s alleged improper conduct in servicing mortgage loans that are collateral for RMBS certificates owned by KIRP.  Specifically, KIRP alleges that Nationstar auctioned off defaulted mortgages loans at prices far below the loans’ value in breach of Nationstar’s obligations under its master servicing contract.  KIRP further alleges that Nationstar conducted these auctions to recoup advances Nationstar made to troubled borrowers, in breach of its duties to place the interests of certificate holders above its own interests.  KIRP purports to sue on behalf of all certificate holders in the six RMBS trusts at issue.  KIRP asserts claims for breach of contract, conversion, unjust enrichment and declaratory judgment, and seeks a temporary restraining order, disgorgement of profits, damages, interest and reimbursement of costs and expenses.  Complaint.