Nationstar Broke State Laws With Failure to Pay Interest on Mortgage Escrow Accounts, Lawsuit Alleges

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A proposed class action lawsuit filed in New York alleges Nationstar Mortgage LLC, doing business as Mr. Cooper, has “routinely and willfully” violated the laws of 14 states by failing to pay interest on mortgage funds held in proposed class members’ escrow accounts. The 19-page case states the New York law mandates that Nationstar pay interest to homeowners on all funds deposited into escrow accounts for loans secured by real property located in the state at a rate of at least two percent per annum.

According to the case, Nationstar purchased the plaintiff’s mortgage loan from a predecessor-in-interest in June 2016. The plaintiff says that from June 2016 until she sold her home in late-August 2017, she had been required to and did make thousands of dollars in escrow payments on top of her regular monthly mortgage principal and interest payments.

The plaintiff alleges she received no accrued interest on her escrow account from Nationstar or its predecessor-in-interest. Instead, the woman claims the companies “kept for themselves the interest earned on the escrow accounts.”