Nationstar, Loan Trust: Who Really Owns The Loans?

Nationstar Mortgage LLC, now known as Mr. Cooper Mortgage, is one of the largest mortgage servicers in the US. The company manages the day-to-day needs of a loan, including preparing statements and taking payments. In 2016, Nationstar executed an option to purchase HECM loans related to a reverse mortgage loan trust, of which it was the master servicer and holder of clean-up call rights. The company has been accused of unlawful mortgage loan servicing practices, including improper foreclosure and increasing monthly loan payments. Nationstar Mortgage LLC now has US-based customer service and has eliminated online transaction fees for on-time customer payments.

Nationstar Mortgage LLC became Mr. Cooper Mortgage in 2017

Nationstar Mortgage LLC, doing business as Mr. Cooper, is a home loan servicer headquartered in the Dallas, Texas area. It is the consumer-facing mortgage lender and servicer of its parent company, Mr. Cooper Group. Nationstar was founded in 1994 as Nova Credit Corporation in Denver, Colorado. In 1997, the company moved to Dallas, Texas, and changed its name to Centex Credit Corporation. In 2001, Centex Credit Corporation was merged into Centex Home Equity Company, and it operated as the subprime mortgage originator and servicer for Centex until 2005. In 2005, Centex Homes decided to withdraw from non-homebuilding businesses, including mortgage services.

In 2016, Nationstar executed an option to purchase HECM loans related to a reverse mortgage loan trust, of which it was the master servicer and holder of clean-up call rights. The company acquired reverse mortgage loans, which were recorded as mortgage loans held for sale. In June 2016, Nationstar sold the loans, and the servicing fees related to these interests were recorded as a component of interest income.

In 2017, Nationstar Mortgage LLC rebranded and changed its name to Mr. Cooper Mortgage. Mr. Cooper is one of the largest mortgage servicers in the United States, with a servicing portfolio of approximately $1.2 trillion and more than 5.4 million customers.

Mr. Cooper has received positive reviews for its user-friendly web platform, good customer service, and award-winning mobile app. However, there have also been concerns raised about its data security practices, with a significant data breach in 2023 exposing the personal information of nearly 15 million borrowers and applicants. Additionally, in 2020, the Consumer Financial Protection Bureau filed a complaint against Nationstar, alleging that the company violated multiple Federal consumer financial laws and caused substantial harm to borrowers. As a result, Nationstar was required to pay approximately $73 million in redress to harmed borrowers and a $1.5 million civil penalty.

Mr. Cooper Mortgage has improved customer service

Mr. Cooper Mortgage, formerly known as Nationstar Mortgage, has taken steps to improve its customer service. The company has been ranked #1 in Default Management performance metrics, demonstrating its commitment to working with borrowers to create plans that meet their needs. For example, if a loan is 30 days delinquent, Mr. Cooper has effective strategies to bring it back to current. They also provide a range of mortgage assistance options, including loan modification, reinstatement, repayment, and pandemic forbearance plans.

Mr. Cooper has a user-friendly web platform and mobile app, making it convenient for customers to manage their loans and track payments. Their loan officers and processors are described as "great," and the company is praised for its understanding approach when customers face difficulties in making payments.

In terms of customer complaints, Mr. Cooper provides multiple channels for customers to voice their concerns and seek resolution. Customers can utilize the secure Message Center, download and complete a form to be sent by mail, or access various resources on the help center page of their website. Mr. Cooper encourages customers facing issues to reach out so that they can resolve them.

Mr. Cooper has also taken steps to address any past issues with unlawful mortgage loan servicing practices. Attorneys general from all 50 states and other regulatory bodies worked with the company to yield nearly $85 million in recoveries for consumers, demonstrating a commitment to improving customer satisfaction and addressing past concerns.

While there was a data breach in Q4 2023 that exposed customer information, Mr. Cooper has likely improved its data security measures since then, and the incident does not appear to have significantly impacted its overall customer service reputation. Overall, Mr. Cooper Mortgage has made notable improvements in customer service, earning positive reviews from many of its customers.

Mr. Cooper Mortgage offers a credit card for holders of its home loans

Mr. Cooper Mortgage, formerly known as Nationstar Mortgage, offers a credit card for holders of its home loans. The company has improved its customer service since its rebranding in 2017, employing US-based support agents who are available by phone or online. Mr. Cooper Mortgage also provides a range of online resources to educate customers about the home-buying process.

Mr. Cooper Mortgage offers a straightforward application process, with a Close On Time Guarantee. If the company fails to close a loan by the promised deadline, it covers the customer's first month of mortgage payments. The company also offers a 45-day rate lock to help borrowers secure a rate without worrying about it changing. Additionally, Mr. Cooper Mortgage provides a 1% Mortgage Markdown, reducing the interest rate by a full percentage point for the first year, which can potentially save borrowers thousands of dollars.

Mr. Cooper Mortgage's rates trend slightly lower than the national average, and it offers both fixed mortgage rates and adjustable-rate mortgages. The company's refinance rates are also lower than the national average, and it provides a RateSwap perk that gives eligible borrowers up to $1,500 in credit for refinancing.

Mr. Cooper Mortgage, previously Nationstar Mortgage, has had some legal troubles in the past, including a settlement with the California Department of Business Oversight for overcharging customers. However, the company has transformed since its rebranding, eliminating online transaction fees for on-time customer payments.

Nationstar Mortgage allegedly engaged in unlawful servicing practices

Nationstar Mortgage, LLC, which does business as Mr. Cooper, has been accused of engaging in unlawful mortgage loan servicing practices. On December 7, 2020, the Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed a stipulated judgment and order against the company. The proposed judgment and order, if entered by the court, would require Nationstar to pay approximately $73 million in redress to more than 40,000 harmed borrowers, as well as a $1.5 million civil penalty to the Bureau.

The allegations against Nationstar include:

• Failing to identify loans on its systems that had pending loss-mitigation applications or trial-modification plans, resulting in the company failing to honour borrowers' loan modification agreements.
• Foreclosing on borrowers to whom it had promised it would not foreclose while their loss mitigation applications were pending.
• Improperly increasing borrowers' permanent, modified monthly loan payments.
• Misrepresenting to borrowers when they would be eligible to have their private mortgage insurance premiums canceled.
• Failing to timely remove private mortgage insurance from borrowers' accounts.
• Failing to timely disburse borrowers' tax payments from their escrow accounts.
• Failing to properly conduct escrow analyses for borrowers during their Chapter 13 bankruptcy proceedings.

Nationstar Mortgage is one of the nation's largest mortgage servicers and the largest non-bank mortgage servicer in the United States. The allegations against the company date back to between January 2012 and January 1, 2016. The proposed settlement with Nationstar is part of a larger government effort to address the company's alleged unlawful practices, which also includes assistance from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the United States Trustee Program.

In addition to the CFPB's proposed settlement, Nationstar has also reached a $91 million settlement with 50 states and the District of Columbia, resolving allegations that the company engaged in unlawful practices in the wake of the 2008 financial crisis. This includes $85 million in recoveries and over $6 million in fees and penalties. As part of the settlement, Nationstar will also have to comply with detailed standards for servicing mortgage loans and conduct audits to ensure compliance with those standards.

Nationstar Mortgage allegedly foreclosed on borrowers to whom it had promised it would not

Nationstar Mortgage Holdings Inc., now known as Mr. Cooper, is one of the largest mortgage servicers in the country. Between January 2012 and January 1, 2016, Nationstar allegedly failed to identify loans on its systems that had pending loss-mitigation applications or trial-modification plans. As a result, they failed to honour borrowers' loan modification agreements and allegedly foreclosed on borrowers to whom they had promised they would not.

The Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed a stipulated judgment and order against Nationstar Mortgage, LLC, which was entered on December 8, 2020. The proposed judgment required Nationstar to pay approximately $73 million in redress to more than 40,000 harmed borrowers. The CFPB alleged that Nationstar's actions were unfair and deceptive practices prohibited by the Consumer Financial Protection Act of 2010, as well as violations of the Real Estate Settlement Procedures Act and the Homeowner's Protection Act.

Nationstar was also accused of improperly increasing borrowers' permanent, modified monthly loan payments and misrepresenting to borrowers when they would be eligible to have their private mortgage insurance cancelled. These actions caused substantial harm to mortgage borrowers, leading to a lawsuit and a settlement of nearly $90 million, including a $1.5 million civil penalty. The settlement also included stricter servicing standards to prevent Nationstar from repeating its conduct.

Nationstar Mortgage, also known as Mr. Cooper, has a history of issues with its mortgage practices. In addition to the allegations mentioned above, they have also been known for failing to honour mortgage modifications on the portfolio of loans they acquired. This has resulted in harm to millions of homeowners, with New Jersey residents being particularly affected.

While some customers have reported positive experiences with Mr. Cooper, such as user-friendly interfaces and understanding when dealing with late payments, others have expressed concerns about being hassled for payments and experiencing issues with refinancing. It is important for borrowers to be aware of their rights and seek legal assistance if they encounter similar issues with Nationstar Mortgage or Mr. Cooper regarding their loan agreements and foreclosure practices.

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