Nationstar Mortgage, the nation’s largest nonbank residential mortgage servicer, will fork over more than $1.5 million to settle allegations that it charged Maryland homeowners illegal inspection fees.
Nationstar arranges for property inspections when homeowners are in default, in order to protect the interests of mortgage lenders. Maryland law prohibits passing the costs of these inspections on to homeowners. However, Nationstar allegedly charged homeowners for the inspections until Jan. 1, 2014, for forward loans and until February of 2016 for reverse mortgages. All told, the company assessed Maryland homeowners more than $1 million in illegal inspection fees, according to the state attorney general’s office.
“These inspection charges violate state law,” said Maryland Attorney General Brian E. Frosh. “They were performed for the benefit of lenders, not the benefit of homeowners. We are pleased that the victims of the illegal charges will be made whole.”
Under the terms of the settlement, Nationstar will:
- Not collect inspection fees in the future
- Return more than $260,000 in fees in addition to the $827,759 it has already returned
- Pay the Maryland Consumer Protection Division nearly $490,000 in penalties and $10,000 in costs
The news comes on the heels of a disclosure by the servicer that the Consumer Financial Protection Bureau is considering an enforcement action against it over alleged violations of the Real Estate Settlement Procedures Act, the Consumer Financial Protection Act and the Homeowners Protection Act.
Nationstar Mortgage discloses potential CFPB enforcement action