In a major legal development, Nationstar Mortgage LLC, doing business publicly under the brand name Mr. Cooper, agreed to a $5.8 million settlement over alleged violations of mortgage servicing that caused many borrowers to be foreclosed upon wrongfully. The settlement is going to provide monetary reliefs to the consumers without substantial documentation.
Background of the settlement
Nationstar Mortgage is one of the largest mortgage servicers in the United States accused of rampant servicing errors and abuses which have cost borrowers money and sometimes even their homes through foreclosure. Since the alleged violations occurred in certain periods and under specific circumstances, therefore, this settlement has been formed to compensate the concerned parties.
Eligibility of borrowers
The main two categories of eligible borrowers named in the settlement are:
- The servicing transfer population: This includes borrowers whose loans were transferred to Nationstar for servicing anytime between February 1, 2011, and December 18, 2017. To qualify, the loan had to become more than 30 days delinquent within the 90-day period after the date of the transfer and then foreclose.
- Property preservation class: All borrowers whose properties were inspected by Nationstar, found to be vacant, and for which the locks were changed from June 24, 2011 through December 29, 2017. To fall within this class, a borrower must have requested access to the property within 30 days of the date the locks were changed. Also falling within the class are borrowers whose property status was changed to “occupied” within 90 days of the lock change.
Compensation details
Eligible borrowers will receive cash payments in varying amounts depending on their settlement group classification. While specific cash payment values were not disclosed, class members may have already been provided with preliminary estimates when the notifications were sent to them. In fact, the settlement has been structured to minimize the burden on the claimants so that compensation can be awarded easily with least paperwork.
Claim filing procedure and deadline
Affected borrowers would need to file a claim form to be included in the settlement. The deadline to file claims is March 3, 2025. It is advisable that borrowers review the eligibility criteria with due care and make timely claims to get the compensation they deserve.
Nationstar’s response and previous settlements
Similar complaints in the past led to settlements by Nationstar Mortgage. There have been cases where it assured compensation for the affected borrowers and an end to the recurrence of servicing errors. The $5.8 million settlement arrived at this time is thus part of the company’s effort at making amends for its past misdeeds and giving compensation to the affected people.
More related settlements
On the related note, Arthur J. Gallagher & Co. reached a $21 million settlement after a 2020 data breach involving sensitive personal information of its clients and employees. The affected could also get up to $6,000 under an award if the losses-which includes fraud and identity theft, among other things-were documented and filed. The deadline to postmark a claim under the settlement is Feb. 10, 2025.
Similarly, Progressive Corporation has agreed to pay a $3.25 million settlement in regard to data breach class action over its failure to safeguard client information. The Class members are able to file claims for as much as $5,000 on or before February 18, 2025.
