Illinois Joins $15.5 Million Settlement with Mortgage Servicer

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Washington, D.C. – Illinois and 47 state financial agencies in 47 states have reached a $15.5 million settlement with one of the nation’s largest mortgage servicers for improperly imposing “force-placed” insurance costs on borrowers who already had active homeowners insurance policies. Under the terms of the settlement, Fort Washington, Penn., based NewRez LLC (NMLS ID 3013), will pay a total of $15.5 million. The company worked with state regulators to self-identify and proactively remediate more than $4.5 million to the impacted borrowers, and it will pay nearly an additional $11 million for costs and penalties. NewRez will be required to implement and conduct enhanced monitoring for loans that have force placed insurance. The company also must implement other actions to strengthen controls. The settlement resolves an issue discovered in a multistate examination of NewRez that found the company had improperly imposed “force-placed” insurance on more than 4,200 borrowers nationwide with active homeowners’ insurance policies, causing consumer harm in the sum of $4.5 million.