The Real Deal New York

Bank regulator investigates Nationstar’s growth

Department of Financial Services follows up complaints about mortgage servicer

March 05, 2014 05:15PM

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Benjamin Lawsky

Benjamin Lawsky

The chief bank regulator in New York is taking a closer look at the business practices of mortgage provider Nationstar Mortgage amid complaints from Empire State borrowers.

According to consumer complaints, Texas-based Nationstar Mortgage failed to fund more than a hundred loans. The allegations prompted the superintendent of the Department of Financial Services, Benjamin Lawsky, to send a letter asking the company for an explanation.

“We have received hundreds of complaints from New York consumers about your company’s mortgage practices, including problems related to mortgage modifications, improper fees, lost paperwork, and numerous other issues,” Mr. Lawsky said in the letter, cited by Bloomberg News.

Nationstar is mostly owned by Ocwen and Fortress Investment Group. The servicer more than doubled its unpaid principal balance to $283 billion in December of 2013, up from $126 billion last year, Bloomberg reported.

The letter is part of Lawsky’s recent investigation of rapid growth by non-bank mortgage servicers, four of which have made the top ten companies in the industry, servicing more than $1 trillion in mortgages, as The Real Deal previously reported. [Bloomberg]Angela Hunt

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