Florida Attorney General Pam Bondi has announced that a settlement was reached with Nationstar Mortgage, doing business as Mr. Cooper, that “resolves allegations regarding Mr. Cooper’s servicing misconduct in the aftermath of Hurricane Irma.”
(If you're in foreclosure, or being threatened with foreclosure after a hurricane, contact our firm for a free Hurricane Hardship Review.)
Mr. Cooper's Misconduct
Mr. Cooper/Nationstar is a mortgage lender and servicer based in Texas which services mortgages nationwide. Their misconduct related to Hurricane Irma is similar to stories we've heard from homeowners with loans serviced by many servicers after the hurricane. It goes like this:
A mortgage servicer tells a homeowner that they can postpone 3-6 months of mortgage payments to recover from the financial impact of Hurricane Irma.
They call this a “disaster forbearance plan”. The servicer tells the homeowner that the mortgage payments will be added to the end of their loan. But that's not what happens at the end of the forbearance period. From Bondi's press release “Instead, the payments became due in a lump sum at the end of the three-to-six-month period. As a result, many Floridians unknowingly became delinquent on mortgages and faced demands for hefty payments.”
How wrong is that? A servicer wouldn't allow the homeowner to go back to making their mortgage payments until they repaid all of the missed forbearance payments in one lump sum, even though they they said those payments would just be added to the end of their loan! Unable to pay the amount their servicer wanted, many homeowners went into default on their mortgage, accumulated fees, and fell into foreclosure. It's terrible.
Mr. Cooper's, and other servicers', offers of relief to homeowners going through a hardship actually caused an additional hardship!
Mr. Cooper has signed something called an Assurance of Voluntary Compliance to resolve the alleged misconduct. They admit to no wrongdoing, but agreed to place a foreclosure hold on, and pay $350 each to, homeowners enrolled in their forbearance plan who were current on their mortgage when Hurricane Irma made landfall.
Getting Your Settlement Money
If you're eligible for one of these payments, and have already filed a complaint with the Attorney General's Office or Mr. Cooper, you will receive payment immediately, according to the Attorney General's press release. If you haven't filed a complaint, you have until March 18, 2019 to do so.
For more information on your eligibility for a $350 payment, you can contact the Florida Attorney General's Office at 866-9-NO-SCAM or Mr. Cooper.
The press release also states: “In addition to the payments to eligible borrowers, Mr. Cooper is required to apply all loss mitigation options to assist impacted homeowners in obtaining loan modifications or other relief if homeowners are unable to make lump sum payments.”
Settlement Shmettlement
This settlement is better than nothing, but Mr. Cooper still isn't putting those forbearance payments on the end of the loan like they said they would. They're still requiring the lump sum payment and charging late fees to people who can't pay it. And “applying all loss mitigation options”, like loan modifications, doesn't guarantee that a homeowner will actually be approved for one. You could still end up losing your house to foreclosure because of Mr. Cooper's misconduct.
Seems like the right thing to do would be to put the forbearance payments on the end of the loan, eliminate any late charges, return to normal servicing all loans that were current before the hurricane, and give borrowers a meaningful cash settlement for their trouble. That is not happening.
Getting Professional Help
The sad reality is that once you fall behind on your mortgage for any reason, even if it's because of your servicer's lies or mistakes, it can be very hard to avoid foreclosure and return your mortgage to normal. If you want to keep your home and avoid foreclosure after falling behind on your mortgage, you should consider hiring a lawyer.
An experienced attorney can defend you from foreclosure and give you the best odds of being approved for a loan modification. Our firm has helped thousands of homeowners get a loan modification, including some who fell behind because of a Hurricane Irma forbearance.
