Nationstar Mortgage, the nation's largest nonbank servicer of home mortgages, has agreed to refund or reverse more than $1 million in inspection fees, settling allegations by Maryland officials it illegally charged homeowners.
Maryland Attorney General Brian E. Frosh announced Nationstar's settlement Monday with his Consumer Protection Division and the Commissioner of Financial Regulation.
Nationstar arranged for property inspections to protect the interests of mortgage lenders when homeowners were in default on their payments, Frosh said. It passed on the inspection fees to homeowners until January 2014 for forward loans and until February 2016 for reverse mortgages, he said.
"These inspection charges violate state law," Frosh said in a statement. "They were performed for the benefit of the lenders, not the benefit of the homeowners. We are pleased that the victims of the illegal charges will be made whole."
Under the settlement, Nationstar agreed to not collect inspection fees in the future, return more than $260,000 in fees in addition to $827,759 that it returned during the investigation and pay the Consumer Protection Division close to $490,000 in penalties and $10,000 in costs.
In a statement, Nationstar Chairman and CEO Jay Bray said the company recognized and resolved the "operational issue" addressed by the settlement and corrected the impacted accounts.
"Our customers are our top priority, and we're confident this issue has bee successfully contained and thoughtfully addressed," he said.
Tribune Content Agency