Over the last several years, many of the top mortgage servicing companies (both banks and nonbanks alike) moved some of their customer service operations overseas as part of an effort to cut costs and improve profitability.
But the practice, known as offshoring, proved somewhat problematic for the servicers, as customers frequently complained of issues when dealing with offshore customer service representatives.
Here’s how Fitch Ratings described the issue back in 2014:
“Less experienced offshore staff can lead to ineffective communication with borrowers,” Crowe said. “Even with effective scripting, an offshore call center agent typically does not have the same frame of reference or local knowledge as a U.S. based call center agent. Fitch has found that reliance on scripting works best when calls are predictable and do not deviate from the norm.”
But even with effective scripting, the potential for communication issues is still significant.
Not to mention the regulatory risk that servicers take when using offshore operations, as evidenced by Ocwen Financial being fined last year for using unlicensed offshore operations.
While offshoring has its benefits, one servicer is choosing to listen to its customers and move its customer service operations back onshore.
Nationstar Mortgage (soon to be Mr. Cooper) announced Wednesday that it is bringing its customer service operations back to the U.S.
Nationstar Mortgage is facing a fine from the Consumer Financial Protection Bureau over the nonbank’s alleged failure to comply with the reporting requirements of the Home Mortgage Disclosure Act, the company revealed Thursday.
Nationstar disclosed the potential fine in its 10-K filing with the Securities and Exchange Commission.
In the filing, Nationstar said it is “currently in negotiations with the CFPB regarding the payment of civil monetary penalties for the alleged failure to comply with the reporting requirements of the Home Mortgage Disclosure Act.”
The Home Mortgage Disclosure Act, referred to as HMDA, was originally enacted in 1975 and requires many financial institutions to collect data about each company’s housing-related lending activity.
New York Attorney General Eric Schneiderman is investigating practices related to the servicing of reverse mortgages at Financial Freedom, a part of OneWest Bank, and at Champion Mortgage, a unit of Nationstar Mortgage, as the state further heightens its recent focus on reverse mortgages, an article in The Wall Street Journal by Annamaria Andriotis stated.
“The inquiry, which is in early stages, is examining whether businesses employed tactics that pushed elderly borrowers into foreclosure,” the article sated.
SAN FRANCISCO — A special trustee has filed suit against a mortgage company for allegedly wrongfully foreclosing on a property.
3216 Balboa LLC filed a complaint Oct. 5 in U.S. District Court for the Northern District of California against Nationstar Mortgage LLC, alleging that the Texas company breached its duty of good faith and fair dealing.
According to the complaint, the plaintiff alleges that on May 19, 2014, 3216 Balboa LLC’s sole managing member, David Rienhart, was named as a special trustee by his former wife, together with Joanna Cheung, who later quitclaimed all of the trust’s interests in the subject property to the plaintiff for the benefit of his children.
ST. CHARLES COUNTY (KMOV.com) –
A mortgage mistake nearly cost a St. Charles County woman her condo.
Kathleen Rasmussen claims she paid Texas based Nationstar each month.
“I don’t want to lose the roof over my head, I should not be in foreclosure.”
Rasmussen provided News 4 with letters from Nationstar along with returned checks intended to pay her mortgage.
“I don’t understand why they keep sending it back to me.”
A Kansas City law firm representing Nationstar sent Rasmussen a letter saying their office would “commence foreclosure proceedings.”
After trying to resolve the issue on her own, Rasmussen contacted News 4 Investigates.
“We’re going round and round in circles and we’re not getting anywhere,” she said.
A Nationstar representative followed up with Rasmussen immediately after hearing from News 4. Rasmussen said, “right after that the VP of Nationstar called me and wanted to settle it right away.
Nationstar Mortgage Holdings and Bank of America have been hit with a proposed class action accusing them of inflating the amounts owed by mortgageholders when their loans matured.
Filed on Friday in federal court in Fresno, California, the lawsuit seeks damages for borrowers nationwide who were allegedly charged “extortionate” amounts not listed on their mortgage payment schedules, putting them at risk of foreclosure.
ORDOVA, TN (WMC) –
A Shelby County Circuit Court lawsuit and government records revealed a pattern of fraud allegations against mortgage-servicing company Nationstar Mortgage.
The WMC Action News 5 Investigators launched an investigation of the Dallas-based mortgage-servicer after it foreclosed on the Cordova, Tennessee, home of Linda Howard. Howard and her husband had owned the home since 1998. Her attorney Kevin Snider produced records that proved Howard never missed a payment since Nationstar Mortgage started servicing her mortgage in 2011.
Also according to the records, Nationstar Mortgage suddenly started refusing her monthly payments in February of this year. From February to May, the company sent her payments back with statements posting thousands of dollars in unexplained fees like “property inspections” and “disbursement insurance.”
“I wrote them. I called them. And I got no response,” Howard said.
Snider said Nationstar Mortgage kept returning Howard’s payments and kept ignoring her requests for explanation of the fees until it foreclosed on her house in May, then sold it at auction. “Nationstar improperly foreclosed on the property,” Snider said.