Bondi, mortgage company reach settlement regarding misrepresentation of disaster forbearance plan

By Carrie Bradon | Oct 8, 2018

TALLAHASSEE  – Attorney General Pam Bondi recently announced a settlement with one of the largest non-bank residential mortgage providers in the country that allegedly engaged in misconduct regarding a mortgage forbearance plan in the wake of Hurricane Irma in 2017.

Nationstar Mortgage, doing business as Mr. Cooper, was accused of misconduct after they enrolled 19,500 Florida homeowners in their disaster forbearance plan. The disaster forbearance plan was designed to help homeowners recover from the effects of Hurricane Irma by allowing them to not pay their mortgage for three to six months following the storm. 

Mr. Cooper told homeowners that the mortgage payments in the forbearance plan would be added to the end of the loan, when in fact it was added as a lump sum following the three to six month period, the Sept 27 announcement said.. 

Following this miscommunication, a number of homeowners became behind on their mortgages and were solicited for larger payments than their normal mortgage payments. 

Whitney Ray, Bondi's director of communications, explained the situation. 

"This is the first time our office encountered this level of complaint activity relating to forbearance plans," Ray told Florida Record. "We suspect this high level of demand was also unusual for some mortgage servicers who may not have been adequately prepared to respond to the volume of people seeking help –possibly leading to misrepresentations to consumers about the terms of such plans."

The terms of the settlement outline that Mr. Cooper must place homeowners who were enrolled in the forbearance plan prior to the storm to have their foreclosures put on hold.

Additionally, the mortgage company is required to pay $350 to each of the borrowers who were up-to-date with payments when the hurricane hit, enrolled in the forbearance plan after the storm and those who believe that the company misrepresented the terms of the plan.

Homeowners have until until March 18, 2019, to file a complaint against Mr. Cooper.

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