The Consumer Financial Protection Bureau (CFPB) recently announced significant enforcement action against Freedom Mortgage Corporation for violations related to a previous consent order and inaccuracies in reporting mortgage loan data. This action underscores the importance of regulatory compliance in the mortgage lending industry and serves as a reminder of the consequences for non-compliance.
Background
In 2016, Freedom Mortgage was ordered to pay $1.75 million in redress and adhere to specific compliance measures as part of a consent order with the CFPB. The order aimed to address previous violations and ensure proper compliance with federal consumer financial laws.
Violations and Findings
The CFPB found that Freedom Mortgage failed to fully implement the compliance measures outlined in the 2016 consent order. Specifically, the company was cited for inaccuracies in its reporting of Home Mortgage Disclosure Act (HMDA) data for the years 2017 and 2018. The HMDA requires lenders to collect and report information on mortgage lending practices, including data on applicant demographics.
Enforcement Action
As a result of these violations, the CFPB imposed a civil money penalty of $1.75 million on Freedom Mortgage. In addition to the financial penalty, the company is required to correct the inaccuracies in its HMDA data and enhance its compliance management system to prevent future violations.
Implications for Mortgage Lenders
The enforcement action against Freedom Mortgage highlights the CFPB’s commitment to enforcing compliance with consumer financial protection laws. Mortgage lenders are reminded of the importance of accurate reporting under the HMDA and the consequences of failing to maintain effective compliance management systems.
Freedom Mortgage’s Response
In response to the CFPB’s action, Freedom Mortgage has pledged to cooperate fully with the bureau and implement the necessary corrective measures. The company aims to improve its compliance management systems and ensure the accuracy of its data reporting moving forward.
Conclusion
The CFPB’s enforcement action against Freedom Mortgage Corporation serves as a clear message to the mortgage lending industry about the importance of regulatory compliance and accurate data reporting. By holding Freedom Mortgage accountable for its violations and requiring corrective actions, the CFPB aims to protect consumers and maintain transparency in the mortgage lending market.
For mortgage lenders and financial institutions, staying abreast of regulatory requirements and maintaining robust compliance measures is crucial to avoid penalties and uphold consumer trust. The actions taken by the CFPB underscore the need for diligence and adherence to federal consumer financial protection laws.
Stay tuned for further developments and insights into regulatory compliance in the mortgage industry as the CFPB continues to monitor and enforce standards that safeguard consumers and promote fair lending practices.
