Nationstar Mortgage discloses potential CFPB enforcement action

The company said it does not believe a loss is probable

By Francis Monfort

15 May 2018

Nationstar Mortgage Holdings has disclosed in a regulatory filing with the SEC that it is facing a potential enforcement action by the CFPB over violations of the Real Estate Settlement Procedures Act, the Consumer Financial Protection Act, and the Homeowners Protection Act.

The CFPB on April 24 notified the company that its Office of Enforcement is considering whether to recommend that the bureau take enforcement action against Nationstar. The potential violations stem from a 2014 examination.

Nationstar said that it continues to cooperate with the CFPB. The notice provides the company an opportunity to present its position to the CFPB before an enforcement action may be recommended or commenced. Nationstar said it intends to do so.

“There can be no assurance that the CFPB will not seek to exercise its enforcement authority through settlement, administrative proceedings, or litigation and seek injunctive relief, damages, restitution, and civil monetary penalties, which could have a material adverse effect on our business, reputation, financial condition, and results of operations,” Nationstar said in the filing. “However, we believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with any potential CFPB enforcement action.”

Nationstar also said that it does not believe a loss is probable and that it has not recorded an accrual related to the matter as of March 31. While there is a chance that the company may incur a loss, it the possible loss is not estimable.