CFPB Imposes Largest HMDA Fine To Date Against Nationstar Mortgage

The Consumer Financial Protection Bureau (CFPB) last week ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty  for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014.

The action is “the largest HMDA civil penalty imposed by the bureau to date, which stems from Nationstar’s market size, the substantial magnitude of its errors and its history of previous violations,” the CFPB said in statement.

Nationstar was put on notice in 2011 because of HMDA compliance problems. In addition to paying the civil penalty, Nationstar must take necessary steps to improve its compliance management and prevent future violations.

“Financial institutions that violate the law repeatedly and substantially are not making serious enough efforts to report accurate information,” CFPB Director Richard Cordray said in a statement. “We are sending a strong reminder that HMDA serves important purposes for many stakeholders in the mortgage market, and those required to report this information must make more careful efforts to follow the law.”

Nationstar, a nationwide non-bank mortgage lender headquartered in Coppell, Texas, is a wholly-owned subsidiary of Nationstar Mortgage Holdings Inc. With nearly 3 million customers, Nationstar Mortgage Holdings is a major participant in the mortgage servicing and origination markets.

Nationstar was the ninth-largest HMDA reporter by total mortgage originations, the sixth largest by applications received, and the 13th largest by money lent in 2014. The lender’s number of HMDA mortgage loans increased by nearly 900 percent from 2010 to 2014, according to the CFPB’s statement.

The CFPB’s order requires Nationstar to:

  • Pay a $1.75 million penalty: Nationstar will pay a $1.75 million penalty to the CFPB’s Civil Penalty Fund.
  • Develop and implement an effective compliance management system: Nationstar will assess and undertake any necessary improvements to its HMDA compliance management system to prevent future violations.
  • Fix HMDA reporting inaccuracies: Nationstar must review, correct and make available its corrected HMDA data from 2012–14.

Since the CFPB’s examination, Nationstar has been taking further steps to improve its HMDA compliance management system and increase the accuracy of its HMDA reporting.

The full text of the order is available here.


CFPB Imposes Largest HMDA Fine To Date Against Nationstar Mortgage

by Jim Morrison time to read: 1 min