Consumer News

AG Derek Schmidt: Kansans to receive $547,000 through mortgage services settlement

Release Date: Dec 07, 2020

TOPEKA – (December 7, 2020) – More than 450 Kansas mortgage holders will receive restitution as part of a nationwide settlement with the country’s fourth-largest mortgage servicer, Kansas Attorney General Derek Schmidt announced today.

Schmidt joined with the attorneys general of all 49 other states and the District of Columbia, the mortgage regulators of Puerto Rico and the U.S. Virgin Islands, and federal agencies to reach an $86.3 million settlement with Nationstar Mortgage, which does business as “Mr. Cooper.” The settlement resolves allegations that Nationstar violated consumer protection laws during the servicing of mortgages. The settlement provides restitution for a variety of harms that were identified during the investigation.

Schmidt said that 465 Kansas mortgage holders would receive $547,158.86 in restitution.

Nationally, nearly 56,000 loans are covered by the settlement, which was filed in U.S. District Court for the District of Columbia. The settlement covers Nationstar conduct occurring from January 1, 2011, through December 31, 2017. Thousands of borrowers had problems when their loans were transferred to Nationstar, leading to foreclosure in some circumstances.

In 2012, Nationstar began purchasing mortgage servicing portfolios from competitors and grew quickly into the nation’s largest non-bank servicer. As loan data was transferred to Nationstar, borrowers who had sought assistance with payments and loan modifications sometimes fell through the cracks, the lawsuit alleged.  Other borrowers suffered damages when Nationstar failed to oversee third-party vendors hired to inspect and maintain properties owned by delinquent borrowers and improperly changed locks on their homes.

The settlement administrator will send a claim form to eligible borrowers in 2021. Nationstar has already provided some of the relief outlined in the settlement. A copy of the settlement can be found at https://bit.ly/36QjaSv.

The settlement is the latest in efforts by Schmidt’s office to protect consumer interests as it relates to mortgage servicing activities during the Great Recession. In February 2012, Schmidt joined attorneys general from 49 states and the federal government in a National Mortgage Settlement with the country’s five largest mortgage servicers. The action resulted in more than $50 million in direct relief to Kansas borrowers. In addition, Schmidt reached settlements in 2014 with SunTrust Mortgage Inc., and in 2016 with HSBC related to mortgage services.

Consumers with questions about this settlement or other mortgage issues can visit the Kansas Attorney General’s Consumer Protection Division at www.InYourCornerKansas.org or by calling (800) 432-2310.

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