CFPB proposes stiff penalty for Nationstar’s alleged servicing failings

The true role of a mortgage servicer is to help the borrower, through thick and thin. Nationstar, the CFPB alleges, was actively doing the opposite and will have to pay for that.

The CFPB has wrapped up its investigation into “Nationstar’s failings”, now doing business as Mr. Cooper, which “resulted in substantial consumer harm,” according to a complaint from the consumer protection entity. In order to repair said harm, the CFPB is recommended proposed judgments and orders, if entered by the court, will yield nearly $85 million in recoveries for consumers to date and over $6 million more in fees and penalties. Though, reading between the lines, most of this has already been paid by Mr. Cooper in an effort to get ahead of the ruling.

The CFPB alleges that between January 2012 and January 1, 2016, in numerous instances Nationstar failed to identify loans on its systems that had pending loss-mitigation applications or trial-modification plans, and as a result failed to honor borrowers’ loan modification agreements.

Nationstar allegedly foreclosed on borrowers to whom it had promised it would not foreclose while their loss mitigation applications were pending.

If the complaint is to be believed, Nationstar made it more difficult for borrowers to get current. That’s because Nationstar also allegedly improperly increased borrowers’ permanent, modified monthly loan payments, mispresented to borrowers when they would be eligible to have their private mortgage insurance premiums canceled, and failed to timely remove private mortgage insurance from borrowers’ accounts.

Nationstar allegedly failed to timely disburse borrowers’ tax payments from their escrow accounts and failed to properly conduct escrow analyses for borrowers during their Chapter 13 bankruptcy proceedings.

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What’s fueling the million-dollar housing boom?

Because of the pandemic, 1 in 3 workers had their pay cut during the pandemic, and women’s salaries are taking longer to recover, thus driving wage discrepancy away from equality. In fact, one in four women is considering downshifting their careers or leaving the workforce due to Covid-19.

But fear not, the sales of million-dollar homes are booming. Wealthy Americans, largely untouched by the recession and eager for more living space, have been on a homebuying binge.

Demand for million-dollar homes is growing faster than any other price tier in the pandemic-driven U.S. housing boom. In October, applications for mortgages larger than $766,000 jumped 59%, the biggest gain for all segments measured by the Mortgage Bankers Association. By comparison, the increase in mortgages from $150,000 to $300,000 was 13%.

“We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers,” Chief Executive Officer Douglas Yearley said in the company’s earnings statement Monday. He attributed to strong quarter to low borrowing costs, an undersupply of new and previously owned homes and “a renewed appreciation for the home as a sanctuary.”

The phenomenon is attracting a new kind of player to the game, anecdotally speaking.

“iBuyers have definitely slowed down in California after the pandemic but Zillow continues in the lead, said Aaron Norris, VP Market Insights at PropertyRadar, on his LinkedIn with a graphic depiction of the market share. Norris also adds iBuyers are not always the best outcome.

“Most expensive I've seen is a $1+ million condo in Santa Monica. The “buy box” is so different from county to county,” he said. “Progressively, I'm seeing ibuyers avoid repairs. Some ibuyers are only doing paint if needed. Expect hold times YoY to be very different in 2020 compared to 2019.”

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NewRez launches new joint venture —> Mission Mortgage

National mortgage lender and servicer, NewRez is joingin in a partnership with The Menkiti Group, a DC-based, minority-owned integrated real estate services company.

The launch of the new joint venture mortgage company, Mission Mortgage is focused on residential mortgage lending, with clients across Wash DC, Maryland and Virginia.

The new joint venture lender is led by Tom O’Keefe, a 25-year mortgage industry veteran and will be NewRez’s 19th JV partnership under the portfolio of Shelter Mortgage Company, the NewRez business division focused on joint venture lending.

“In conjunction with Shelter Mortgage and NewRez, we are excited to be able to offer this high level of service to the local communities and customers we serve,” added Bo Menkiti, in a statment.

“We are confident this partnership will help us reach more borrowers, facilitate greater access to homeownership, drive wealth creation for those we serve, and strengthen our ability to fulfill our mission of transforming lives, careers and communities through real estate,” he added.

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