NY attorney general launches investigation of reverse mortgage practices – report

by Ryan Smith20 Jan 2017
The New York attorney general is investigating mortgage servicing practices at units of Nationstar Mortgage and OneWest Bank – the institution once run by Trump Treasury nominee Steve Mnuchin.

Eric Schneiderman is investigating reverse servicing practices at Nationstar’s Champion Mortgage unit and OneWest’s Financial Freedom unit, according to a Wall Street Journal report. According to the Journal, Schneiderman is investigating whether the businesses’ tactics pushed reverse borrowers into foreclosure.

Mnuchin spokesperson Barney Keller dismissed the investigation.

“We’re sure any ‘investigation’ is about nothing more than politics,” Keller told the Journal. CIT, the company that currently owns OneWest, declined to comment.

From the time of its creation until its sale to CIT, Financial Freedom initiated almost 10,700 foreclosures, according to the Journal. That accounted for about 8% of all OneWest foreclosure starts.

Meanwhile, a Nationstar spokesperson told the Journal that the company’s “goal across all of our lines of business is always to treat our customers with caring service and help keep them in their homes.”

Nationstar also told HousingWire that it hadn’t been made aware of any investigation. The company also noted that 90% of its Champion reverse mortgage customers in New York are current on their tax and insurance payments.
“We’re actively exploring solutions for those still struggling and have been able to help three quarters of past-due customers avoid foreclosure with repayment plans for their taxes and insurance,” a Nationstar spokesperson told HousingWire.

Earlier this month, New York Gov. Andrew Cuomo announced legislative proposals that would expand protections for reverse mortgage borrowers and increase regulations on lenders.

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DFS launches wide-ranging probe into reverse mortgages


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