Settlement Reached with Mortgage Servicer Regarding Hurricane Irma Disaster Relief

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Attorney General Pam Bondi News Release

Settlement Reached with Mortgage Servicer Regarding Hurricane Irma Disaster Relief

TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced a settlement reached with Nationstar Mortgage, LLC, doing business as Mr. Cooper, a Texas-based mortgage lender and servicer. The settlement resolves allegations regarding Mr. Cooper’s servicing misconduct in the aftermath of Hurricane Irma. Mr. Cooper is one of the largest non-bank residential mortgage servicers in the United States.

According to the Assurance of Voluntary Compliance, Mr. Cooper enrolled more than 19,500 Florida borrowers into disaster forbearance plans to allow homeowners to postpone mortgage payments for three-to-six months while recovering from Irma’s impact. Prior to enrollment, Mr. Cooper allegedly incorrectly advised many homeowners that mortgage payments during the forbearance period would be tacked onto the end of the loan. Instead, the payments became due in a lump sum at the end of the three-to-six-month period. As a result, many Floridians unknowingly became delinquent on mortgages and faced demands for hefty payments. At the Attorney General Office’s request, Mr. Cooper placed a foreclosure hold on Florida borrowers’ accounts enrolled in the plan that were current when Hurricane Irma made landfall. The foreclosure hold ensured eligible homeowners did not lose homes because of enrolling in a plan that supposedly provided relief but instead caused additional hardship, in the aftermath of Hurricane Irma.

As part of the settlement, Mr. Cooper will pay $350 each to Florida borrowers with a loan serviced by Mr. Cooper who were current on mortgage payments when Hurricane Irma made landfall, enrolled in a disaster forbearance plan following Hurricane Irma’s impact, and believe that Mr. Cooper misrepresented the terms of that forbearance plan.
Eligible homeowners that already filed complaints with either the Attorney General’s Office or Mr. Cooper will receive immediate payment. Eligible homeowners who have not filed a complaint may submit claims by March 18, 2019.

In addition to the payments to eligible borrowers, Mr. Cooper is required to apply all loss mitigation options to assist impacted homeowners in obtaining loan modifications or other relief if homeowners are unable to make lump sum payments. Mr. Cooper is also prohibited from making false or misleading representations to Florida borrowers regarding forbearance plans relating to future natural disasters. Mr. Cooper will pay $300,000 to the Florida Attorney General’s Office for future enforcement and reimbursement of investigative costs.

For information on eligibility for a $350 payment, homeowners should contact Mr. Cooper or the Florida Attorney General’s Office at 1(866) 9NO-SCAM.

To view a copy of the AVC, click here.