Nationstar Mortgage LLC has entered into settlement agreements with the Consumer Protection Division and the Commissioner of Financial Regulation to resolve allegations that it charged homeowners illegal inspection fees.
Nationstar, the nation’s largest non-bank servicer of home mortgages, arranges for property inspections in order to protect the interests of mortgage lenders when homeowners are in default on their payments. Although Maryland law prohibits passing the cost of these inspections onto homeowners, Nationstar allegedly charged the inspection costs to homeowners until January 1, 2014 for forward loans and February 2016 for reverse mortgages. Nationstar assessed Maryland homeowners over $1 million in inspection fees.
Maryland Attorney General Brian E. Frosh made the announcement today.
“These inspection charges violate state law,” said Attorney General Frosh. “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 terms of the settlement, Nationstar agrees to:
- not collect inspection fees in the future,
- return over $260,000 in fees in addition to $827,759 that it returned during the Division’s investigation, and
- pay the Division close to $490,000 in penalties and $10,000 in costs.
The Commissioner of Financial Regulation, who licenses Nationstar, has entered into a Memorandum of Understanding contemporaneously with the Consumer Protection Division’s settlement.