Coloradans To Receive Portion Of $79 Million Settlement From 4th-Largest Mortgage Servicer In US

DENVER (CBS4) -- A number of Colorado borrowers will receive payouts from a multistate settlement agreement the legal heads all 50 states and the District of Columbia reached with Nationstar Mortgage.

Nationstar, which conducts business as "Mr. Cooper," agreed to the settlement in response to a lawsuit accusing the company of violating consumer protections laws during the servicing of mortgage loans between the first day of 2011 and the last day of 2017.

Nationstar is currently the fourth-largest mortgage servicer in the country.

The settlement provides approximately $79.2 million in relief nationwide. In total, 55,814 loans were affected nationally; 917 exist in Colorado. The state's collective portion of the payout is about $1.5 million.

"Nationstar's failure to properly service Coloradans' mortgage loans negatively impacted many lives," Colorado Attorney General Phil Weiser stated in a press release. "Through this settlement, we secured relief for Colorado victims of Nationstar's improper servicing practices and ensured that Nationstar will be held accountable for its actions now and in the future. It is notable that this settlement resulted from significant collaborative problem solving by state and federal enforcers to protect consumers."

According to AG's press release, Nationstar began purchasing mortgage servicing portfolios from competitors for quick growth. However, some borrowers who had sought assistance with payments and loan modifications were allegedly ignored by the company. These clients will receive a guaranteed minimum of $840 as part of the settlement.

The lawsuit also alleged that some borrowers suffered damages when Nationstar failed to oversee third-party vendors hired to inspect and maintain properties owned by delinquent borrowers and improperly changed locks on their homes. These borrowers will receive a guaranteed minimum payment of $250.

Nationstar also agreed to a set of new rules - servicing standards that are more comprehensive than existing law, according to the AG's press release - which will be in place for three years starting on at the beginning of 2021.

Nationstar has already provided some of the relief outlined in the settlement. Eligible borrowers who have not yet been notified should expect to be sent a claim form in 2021.

The state attorneys general negotiated the settlement with the help of state mortgage regulators, the federal Consumer Financial Protection Bureau, and the U.S. Department of Justice.