Agreements Address Past Systemic Bankruptcy Servicing Errors Impacting Homeowners
Correction (12/7/2020): Per the Memorandum of Understanding it was U.S. Bank’s policy to perform annual escrow analyses for borrowers in bankruptcy.
The Department of Justice’s U.S. Trustee Program (USTP announced today that it has entered into national agreements with three mortgage servicers to address past mortgage servicing deficiencies impacting homeowners in bankruptcy. The agreements with Nationstar Mortgage, LLC (Nationstar), U.S. Bank National Association (U.S. Bank), and PNC Bank, NA (PNC) address noncompliance with the Bankruptcy Code and Federal Rules of Bankruptcy Procedure that impacted over 60,000 accounts of borrowers in bankruptcy dating back to 2011 and resulted in payment application errors; inaccurate, missing, and untimely bankruptcy filings; and/or delayed escrow statements.
“Homeowners in bankruptcy are entitled to receive proper and timely notices and to have their payments properly accounted for, consistent with the Bankruptcy Code and Rules,” said USTP Director Cliff White. “The failure of mortgage servicers to comply with those requirements compromises the integrity of the bankruptcy system and the ability of homeowners to receive a fresh start.”
Collectively, the USTP’s agreements with Nationstar and U.S. Bank, and the letter of acknowledgement with PNC, provide over $74 million to remediate over 76,000 historical servicing errors impacting borrowers in bankruptcy. The agreements also require the servicers to implement improvements in their bankruptcy operations to ensure that the errors do not recur. Most of the remediation and corrective actions have already been taken by the servicers.
Historical Servicing Deficiencies
Nationstar and PNC at times failed to run annual escrow analyses for borrowers in bankruptcy. Further, Nationstar, U.S. Bank, and PNC failed to (1) file timely and accurate notices of changes to bankruptcy borrowers’ ongoing mortgage payments, (2) file timely and accurate notices of fees assessed during borrowers’ bankruptcy cases, and (3) provide an accurate final accounting of the payments made by the borrower during the bankruptcy case as required under the Bankruptcy Code and Rules.
In addition to these deficient servicing practices, U.S. Bank and PNC failed to accurately apply borrower payments in bankruptcy cases. And U.S. Bank failed to file timely and accurate proofs of claim in bankruptcy cases.
Monetary Remediation and Changes to Internal Procedures
The servicers have or will provide account credits and refunds to impacted bankruptcy borrowers. Nationstar has provided more than $40 million in credits and refunds. U.S. Bank has, or will, provide at least $29 million in credits and refunds, and has waived approximately $43 million in fees and charges across its mortgage servicing portfolio, including for borrowers in bankruptcy. PNC provided close to $5 million in credits and refunds, as well as additional remediation in the form of lien releases and debt forgiveness.
In addition to monetary and other remediation, Nationstar, U.S. Bank, and PNC each made changes to their internal procedures to prevent the recurrence of the deficient bankruptcy servicing practices. These changes included enhancements to computer platforms, improvements to vendor and employee training and oversight, and implementation of quality control processes to ensure the accuracy and timeliness of filings in bankruptcy cases and escrow analyses for borrowers in bankruptcy.
No Effect on Non-Parties
These agreements do not affect the rights of any homeowner or other third party, including other governmental agencies. Bankruptcy borrowers with questions may contact the servicers at:
Nationstar Mortgage LLC at 833-981-2112,
PNC Bank at 855-245-3814, and
U.S. Bank at 888-724-7362.
The agreements are posted at https://www.justice.gov/ust/national-mortgage-settlements.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more about the Program at: https://www.justice.gov/ust.
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- Joint Statement Calling for a Ceasefire in Nagorno-KarabakhBy Sam NewsOctober 5, 2020
- Justice Department Files Lawsuit Against Facebook for Discriminating Against U.S. WorkersBy Sam NewsDecember 3, 2020The Department of Justice announced today that it filed a lawsuit against Facebook Inc. for discriminating against U.S. workers.[Read More…]
- List Brokerage Firm Pleads Guilty To Facilitating Elder Fraud SchemesBy Sam NewsSeptember 28, 2020Connecticut list brokerage firm Macromark Inc. pleaded guilty on Friday to knowingly providing lists of potential victims to fraudulent mass-mailing schemes, the Department of Justice announced. The fraudulent schemes tricked consumers into paying fees for falsely promised cash prizes and purportedly personalized “psychic” services. Thousands of consumers lost millions of dollars to the schemes.[Read More…]
- How Engineers at NASA JPL Persevered to Develop a VentilatorBy Sam NewsSeptember 26, 2020As coronavirus hit, JPL [Read More…]
- United States and Japan Hold Bilateral Security DiscussionsBy Sam NewsOctober 7, 2020
- Manufacturers of “Spice” Sentenced for Operating a Continuing Criminal Enterprise and Other CrimesBy Sam NewsSeptember 10, 2020Two defendants were sentenced Wednesday to 20 years each in federal prison for crimes committed in connection with the manufacture of synthetic cannabinoid products (commonly referred to as “spice”), operating a continuing criminal enterprise, manufacturing and distributing controlled substance analogues, wire fraud, mail fraud, money laundering, maintaining a drug premises, and possession of a listed chemical with the intent to manufacture a controlled substance.[Read More…]
- Sanctions on Iran’s Financial InstitutionsBy Sam NewsOctober 8, 2020
- U.S. Policy Toward China: Deputy Secretary Biegun’s Remarks to the Senate Foreign Relations CommitteeBy Sam NewsSeptember 27, 2020Stephen Biegun, Deputy [Read More…]
- Justice Department Finds Yale Illegally Discriminates Against Asians and Whites in Undergraduate Admissions in Violation of Federal Civil-Rights LawsBy Sam NewsAugust 13, 2020The Department of Justice today notified Yale University of its findings that Yale illegally discriminates against Asian American and white applicants in its undergraduate admissions process in violation of Title VI of the 1964 Civil Rights Act. The findings are the result of a two-year investigation in response to a complaint by Asian American groups concerning Yale’s conduct.[Read More…]
- United States Places Global Magnitsky Sanctions on the Cuban Ministry of Interior and Its MinisterBy Sam NewsJanuary 15, 2021
- Secretary Blinken’s Call with Swiss President ParmelinBy Sam NewsFebruary 2, 2021
- Justice Department Reaches Settlement with Old Dominion University to Resolve Disability Discrimination ComplaintBy Sam NewsFebruary 3, 2021Today the Justice Department announced a settlement agreement with Old Dominion University (ODU) in Norfolk, Virginia, to resolve its investigation into a complaint that ODU discriminated and retaliated against a graduate student based on disability and her related request for reasonable modifications of policy. The Civil Rights Division conducted the investigation under Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973.[Read More…]
- Indonesian Company Admits To Deceiving U.S. Banks In Order To Trade With North Korea, Agrees To Pay A Fine Of More Than $1.5 MillionBy Sam NewsJanuary 17, 2021A global supplier of cigarette paper products, PT Bukit Muria Jaya (“BMJ”), has agreed to pay a fine of $1,561,570 and enter into a deferred prosecution agreement with the Justice Department for conspiring to commit bank fraud in connection with the shipment of products to North Korean customers. BMJ, which is incorporated in Indonesia, has also entered into a settlement agreement with the Treasury Department’s Office of Foreign Assets Control (“OFAC”).[Read More…]
- France Travel AdvisoryBy Sam NewsSeptember 26, 2020
- Russia Travel AdvisoryBy Sam NewsSeptember 26, 2020Do not travel to Russia [Read More…]
- Former Employee At Los Alamos National Laboratory Sentenced To Probation For Making False Statements About Being Employed By ChinaBy Sam NewsSeptember 15, 2020Turab Lookman, 68, of Santa Fe, New Mexico, was sentenced on Sept. 11 to five years of probation and a $75,000 fine for providing a false statement to the Department of Energy. Lookman is not allowed to leave New Mexico for the term of his probation.[Read More…]
- Israel-Lebanon Maritime NegotiationsBy Sam NewsDecember 22, 2020
- NASA’s Perseverance Rover Goes Through Trials by Fire, Ice, Light and SoundBy Sam NewsSeptember 26, 2020The agency’s new [Read More…]
- Justice Department Requires Divestiture In Order For Anheuser-Busch To Acquire Craft Brew AllianceBy Sam NewsSeptember 18, 2020The Department of Justice announced today that it is requiring Anheuser-Busch InBev SA/NV (ABI), its wholly-owned subsidiary Anheuser-Busch Companies LLC (AB Companies), and Craft Brew Alliance Inc. (CBA) to divest CBA’s entire Kona brand business in the state of Hawaii and to license to the acquirer the Kona brand in Hawaii in order for AB Companies, a minority shareholder in CBA, to proceed with its proposed acquisition of the remaining shares of CBA. The department has approved PV Brewing Partners, LLC as the acquirer. The proposed settlement will maintain competition in the beer industry in Hawaii benefitting consumers.[Read More…]
- Bahrain National DayBy Sam NewsDecember 16, 2020
- Unmanned Aircraft Systems: FAA Could Strengthen Its Implementation of a Drone Traffic Management System by Improving Communication and Measuring PerformanceBy Sam NewsJanuary 28, 2021The Federal Aviation Administration (FAA) is working with industry and public stakeholders to develop a traffic management system for unmanned aircraft systems (UAS), also known as drones. The UAS traffic management ecosystem (referred to as UTM) involves developing a framework of interconnected systems for managing multiple UAS operations. Under UTM, FAA would first establish rules for operating UAS, and UAS-industry service providers and operators would then coordinate the execution of flights. Operators would likely be able to access UTM, for example, through smart phone applications to map routes for UAS flights and check for flight restrictions. FAA began collaborating in 2015 with the National Aeronautics and Space Administration (NASA) to establish and implement a framework to research, develop, and test increasingly complex UTM concepts and capabilities with industry stakeholders. For example, in one scenario tested in Virginia, UAS operators using UTM were alerted to a rescue helicopter, allowing the operators to avoid the area. Example of a Traffic Management Scenario Simulating a Real-World Situation for an Unmanned Aircraft System (UAS) To further develop and implement UTM, FAA conducted tests through its UTM pilot program, completed in November 2020, and is working on a UTM implementation plan. However, industry stakeholders said they need more information on the next steps, and it is uncertain whether FAA's plan will include performance goals and measures. FAA has reported that it plans to use results from the pilot program to inform its implementation plan, statutorily required one year after the pilot program concludes. UAS stakeholders generally agreed with FAA's approach for moving UTM toward implementation. However, they said that they face planning challenges because FAA provides limited information on timing and substance of next steps, such as areas of UTM technology that FAA will focus on during testing. In addition, FAA has not indicated whether the implementation plan will include performance goals and measures, instead stating that such metrics are not statutorily required. Providing more data to the UAS industry and public stakeholders in the short term and including goals and metrics in the plan could help stakeholders make informed decisions and better align their activities with FAA plans for UTM testing and implementation. Why GAO Did This Study UAS have potential to provide significant social and economic benefits in the U.S. FAA is tasked with safely integrating UAS into the national airspace. UTM, as planned, will be a traffic management system where UAS operators and service providers are responsible for the coordination and management of operations at low altitudes (below 400 feet), with rules established by FAA. The FAA Reauthorization Act of 2018 included a provision for GAO to review infrastructure requirements for monitoring UAS at low altitude. This report examines, among other things, the actions FAA has taken to develop UTM and additional steps needed to achieve UTM's implementation. GAO reviewed relevant statutes, regulations, and agency documents; assessed FAA's efforts against internal controls for communicating quality information and GAO's work on results- oriented practices and performance measures; and interviewed 19 UAS industry and public stakeholders selected to achieve a range of perspectives. GAO is recommending that FAA: (1) provide stakeholders with additional information on the timing and substance of UTM testing and implementation efforts using FAA's UTM website or other appropriate means, and (2) develop performance goals and measures for its UTM implementation plan. The Department of Transportation generally concurred with these recommendations. For more information, contact Heather Krause at (202) 512-2834 or email@example.com.[Read More…]
- Florida Man Charged with COVID Relief Fraud, Health Care Fraud and Money LaunderingBy Sam NewsJuly 29, 2020A Florida man has been charged regarding allegations that he fraudulently obtained a Paycheck Protection Program (PPP) loan and an Economic Injury Disaster Loan (EIDL), and that he orchestrated a conspiracy to submit false and fraudulent claims for reimbursement to Medicare and CareCredit, and to defraud his own patients by charging them thousands of dollars for chiropractic services under false pretenses.[Read More…]
- Chief Justice Roberts Issues 2020 Year-End ReportBy Sam NewsIn U.S CourtsDecember 31, 2020Chief Justice John G. Roberts, Jr., has issued his 2020 Year-End Report on the Federal Judiciary.[Read More…]
- Asteroid 1998 OR2 to Safely Fly Past Earth This WeekBy Sam NewsSeptember 26, 2020The large near-Earth [Read More…]
- Condemning ISIS-K Attack on a Kabul GatheringBy Sam NewsMarch 6, 2020
- Inaugural U.S.-Taiwan Economic Prosperity Partnership DialogueBy Sam NewsNovember 21, 2020