CHARLESTON — West Virginia Attorney General Patrick Morrisey's office has joined a coalition of 51 attorneys general and other federal and state agencies to reach a settlement with the country’s fourth-largest mortgage servicer.
The agreement, filed December 7, resolves allegations that Nationstar Mortgage, more commonly known to many as “Mr. Cooper,” violated consumer protection laws during its servicing of mortgage loans.
In West Virginia, the settlement affects more than 160 loans for a total value of $127,075.54 in restitution for affected consumers.
“No West Virginian should be forced to deal with unnecessary headaches caused by the inadequate diligence of their lender,” Morrisey said. “Homeowners deserve to know their lender will be prompt and attentive in servicing their mortgage. Our settlement affirms this expectation and demonstrates that we will take action against those whose conduct unlawfully harms consumers.”
The agreement, filed in the U.S. District Court for the District of Columbia, covers conduct by Nationstar occurring from Jan. 1, 2011, until Dec. 31, 2017.
The agreement also requires Nationstar to follow a detailed set of rules 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.
Attorneys general from all 50 states and the District of Columbia signed the settlement. The coalition collaborated with state mortgage regulators as well as the U.S. Consumer Financial Protection Bureau and U.S. Trustee Program, which filed or plan to file separate agreements.
Nationstar began purchasing mortgage servicing portfolios from competitors in 2012 and grew quickly into the nation’s largest non-bank servicer. The coalition’s lawsuit alleged thousands of borrowers would encounter problems as their loans were transferred to Nationstar, leading to foreclosure in some circumstances.
The lawsuit alleged some borrowers fell through the cracks as they sought assistance with payments and loan modifications. Others suffered damages when Nationstar failed to oversee third-party vendors hired to inspect and maintain properties owned by delinquent borrowers.
A settlement administrator will send a claim form to eligible borrowers in 2021. Nationstar has already provided some of the relief outlined in the settlement.