Nationstar Mortgage LLC has agreed to a more than $9 million settlement that resolves allegations it overcharged borrowers for interest and collected illegal fees.
California law requires that residential lenders do not charge interest on a new mortgage prior to the day that loan proceeds are disbursed.
But Dallas-based Nationstar, which does business as Mr. Cooper, is accused of violating the law
on 48,000 mortgage transactions.
That is according to an announcement Monday from the
California Department of Business Oversight, which said the violations dated back to 2009.
The news release indicated that Nationstar has already refunded $4 million to borrowers for per-diem interest and recording fees.
Nationstar also allegedly charged 1,637 borrowers an origination fee that was determined by the state to be unlawful. Those borrowers will each be refunded $120 plus interest.
In addition,
Nationstar will pay $4.8 million in penalties for past violations, $250 for each additional violation that has been identified by an independent auditor, and $200,000 to cover the costs of the investigation.
“California law also requires mortgage servicers to conduct a reasonable investigation in response to borrower complaints alleging servicing errors,” the department stated. “The DBO found that Nationstar lacked appropriate policies and procedures to conduct a reasonable investigation of complaints involving errors that arose with a prior servicer.”
