Mortgage

Mr. Cooper, US Financial institution & PNC settle claims associated to bankrupt debtors

On the same day that Mr Cooper announced that he had settled allegations of his maintenance practices, he and two other lenders reached a separate agreement with the Department of Justice over bankrupt borrowers.

The U.S. Department of Justice's trustees, which oversees the management of bankruptcy cases and private trustees, reached an agreement with Mr. Cooper, the U.S. Bank, and PNC Bank on non-compliance with the Bankruptcy Act and Federal Rules of Bankruptcy Procedure, more than than 60,000 accounts at all three companies from 2011 were affected.

These errors resulted in payment application errors, inaccurate, missing and premature bankruptcy filings, and late escrow filings, the DOJ said.

"Mortgage servants' failure to meet these requirements compromises the integrity of the bankruptcy system and the ability of homeowners to get a fresh start," said Cliff White, director of the DOJ's US escrow program.

For Mr. Cooper, who was known as a nation star until 2018, the agreement is a reminder of payments of over $ 40 million that the company made to affected borrowers. The US trustee's agreement provides for $ 22.84 million in recovery for bankrupt borrowers under the CFPB settlement. Mr. Cooper pays an additional $ 17.84 million for bankruptcy-related conduct in the case of the U.S. trustee.

The US bank has or will provide $ 29 million in loans and refunds, the DOJ said. The bank also waived approximately $ 43 million in fees and charges on its mortgage service portfolio, including for bankruptcy borrowers.

The U.S. bank said the issues were first identified in 2014 and the bank took corrective action the following year, with certain customers receiving remedial action.

"Our agreement with the US trustee includes additional customer corrections that we are expected to complete in the coming months," said a statement from the US bank. "We take our responsibility to our customers seriously and have worked quickly to ensure that our insolvency processing is carried out fairly and in a compliant manner."

The Justice Department also issued a letter confirming that PNC was providing nearly $ 5 million in loans and refunds, as well as additional remedial action in the form of liens and debt relief.

"We are pleased to move on from this matter and we appreciate the support of the US Trustee's office as we worked to address it," said a statement from PNC Bank. "As stated in the confirmation, PNC has worked fully with the US Trustee's office to provide complete and fair relief to any customer who may be affected."

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