Nationstar Mortgage fined $1.75 Million for Persistent and Substantial Reporting Errors by the Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) ordered Nationstar Mortgage to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA). Naitonstar was found to be consistently failing to report accurate data about mortgage transactions for 2012 through 2014. This is the largest civil penalty imposed by the CFPB to date. The reasons for the size of the fine were:
- Nationstar’s market size
- The substantial magnitude of Nationstar’s errors
- Nationstar’s history of violations
In fact, Nationstar had been on notice since 2011 of its failure to comply with HMDA regulations. Nationstar is also required to improve its compliance management to prevent future violations.
“Financial institutions that violate the law repeatedly and substantially are not making serious enough efforts to report accurate information,” said CFPB Director Richard Cordray. “Today we are sending a strong reminder that HMDA serves important purposes for many stakeholders in the mortgage market, and those required to report this information must make more careful efforts to follow the law.”
Nationstar is a nationwide nonbank mortgage lender headquartered in Coppell, Texas and you can find Locations in NJ. So, with nearly 3 million customers and locations in NJ it is a very good chance that New Jersey Homeowners may have been impacted by Nationstar’s actions. The Home Mortgage Disclosure Act of 1975 requires mortgage lenders to collect and report data about their mortgage lending to appropriate federal agencies. This in turn, makes the data available to the public.
The CFPB’s order requires Nationstar:
- Pay a $1.75 million penalty for their violations to the CFPB’s Civil Penalty Fund
- Develop and implement an effective compliance management system to improve on its reporting
- Fix HMDA reporting inaccuracies from 2012 through 2014
Federal regulators, enforcement agencies, community organizations, and state and local agencies can use the information from the HMDA reporting to monitor whether financial institutions are serving housing needs in their communities to develop programs to help those most in need. For instance, the state of NJ now has the Hardest Hit program which is a federal program. It also helps direct public-sector investment to attract private investment to areas where it is needed. A
In 2015, the CFPB published a rule updating HMDA data collection and reporting. This rule will improve the quality and type of data that is collected and reported, and shed more light on consumers’ access to credit. Most of the rule’s provisions take effect on Jan. 1, 2018. The CFPB’s action against Nationstar relates to data for 2012-14, which was collected and reported under the rule that predates the CFPB.
To view the full CFPB order click here.
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