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.
 

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