Top mortgage servicer facing scrutiny after ‘hundreds of complaints’

by Ryan Smith06 Mar 2014
A top mortgage servicer is facing scrutiny in the wake of hundreds of complaints to regulators about its business practices.

Nationstar Mortgage LLC has been contacted by the New York Department of Financial Services, which requested information on the company’s portfolio and mortgage servicing practices, according to a Reuters report.

Department of Financial Services head Benjamin Lawsky sent a letter to Nationstar saying the state had “significant concerns” that the rapid growth of the company’s servicing business could “create capacity issues that put homeowners at risk.”

Nationstar’s loan-servicing portfolio more than doubled last year, from $126.5 billion in unpaid principal at the end of 2012 to $283.3 billion at the end of 2013, Reuters reported. The company currently collects payments on one out of every 25 homes in the country.

Lawsky expressed concern that the company was not effectively handling the increased business.

“We have received hundreds of complaints ... about your company's mortgage practices,” he wrote. The complaints accused the company of mishandling mortgage modifications, losing paperwork and charging improper fees, among other things, Reuters reported.

Last month New York State leveled similar allegations at the country’s largest non-bank mortgage servicer, Ocwen Financial Corp., derailing the company’s planned purchase of servicing rights from Wells Fargo.
 

COMMENTS

  • by Bob | 3/6/2014 11:51:46 AM

    why do we spend so much on dollar amounts???? It is really the number of mortgages serviced that counts when discussing being 'overwhelmed' by the amount of business. Takes just as much time to service a million dollar mortgage as it does a 100,000 dollar mortgage.

  • by Mandatory Modifications? | 3/6/2014 12:01:55 PM

    Are mortgage modifications now mandatory with every mortgage made? (sarc.)

    Are hundreds of complaints even significant if there are millions of customers?

    So many 'victims' of 'mortgage practices', just to keep it good n' general for the uninformed masses.

  • by phil | 3/6/2014 12:43:29 PM

    I don't condone sloppy servicing, but when is the government going to stop harassing lenders? Every day we are attacked and painted as the bad boys and girls of the world and the slightest consumer complaint rises to a medieval inquisition. At our company a woman who was just plain nasty was given a free re finance so her mortgage could be sold and her farewell gift was her 4th complaint to NYS banking - resulting in legal and compliance inquiries, significant professional fees & at one point a regulator screaming at the CEO. The end result was NYS saw in the paperwork there was no merit and w/out word closed the inquiry. This is getting out of hand.

    If the government does not back off more and more lenders will close and there will be less and less credit available to consumers. And less entities to impose regulatory fees

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