• DYE CULIK PC | Consumer Protection Division

Mr. Cooper a.k.a. Nationstar Mortgage Settles with Mass. AG Due to Loan Modification Violations

mr cooper nationstar mortgage

Nationstar Mortgage, which recently changed its name to Mr. Cooper, settled with the Massachusetts Attorney General’s Office over its violations of a law that is supposed to give homeowners a chance to modify their mortgages if they fall behind. Nationstar allegedly failed to offer loan modifications, and, in some cases, even foreclosed illegally. The settlement is worth millions of dollars in relief to homeowners.

The law at issue requires homeowners to be provided with an opportunity to obtain reasonable loan modifications. This law, called the Massachusetts Act Preventing Unlawful and Unnecessary Foreclosures, is enacted at Chapter 244, Section 35B of the Massachusetts General Laws, and sometimes is just called “35B.” In this case, though, Nationstar failed “to provide a timely and compliant loan modification review” under 35B to numerous Massachusetts homeowners.

The Attorney General says that in many cases, Nationstar either provided no 35B loan modification, or modifications that increased borrowers’ payments above the original unaffordable payment. These are described as “deceptive short-term, interest-only loan modifications” and which then “ballooned” into higher payments. These loans were doomed to fail because Nationstar knew there was no way borrowers could afford them. Many people’s homes were soon be back in foreclosure.

The settlement provides millions in relief and compensation. For the homeowners who were illegally foreclosed on (over 100 of them), Nationstar will pay $500,000 in restitution.  And there are 500-600 other residents who are eligible for review for alternative loan modifications.

The settlement, called an assurance of discontinuance, was voluntarily agreed to by Nationstar, though Nationstar did not admit any wrongdoing.

Here is more information on the Nationstar settlement:

  1. Massachusetts Attorney General’s press release

  2. Settlement with Nationstar

Our office has handled many cases involving Nationstar, from loan modifications, to unlawful mortgage servicing practices, to foreclosures. If you think your rights may have been violated by Nationstar, or by any other bank or mortgage servicer, contact us to see if we can help.

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