CFPB Takes Action Against Former HUD Contract Sub-Servicer

CFPB Takes Action Against Former HUD Contract Sub-Servicer

The Consumer Financial Protection Bureau issued an order to permanently ban Sutherland Global, its subsidiaries Sutherland Government Solutions and Sutherland Mortgage Services, and NOVAD Management Consulting from servicing reverse mortgages and to pay restitution to reverse mortgage borrowers.

Sutherland and NOVAD serviced reverse mortgages on behalf of HUD from 2014 to 2022. The CFPB order states that the companies lacked adequate resources and staffing to handle as many as 150,000 borrowers.

What they’re saying: “Sutherland and NOVAD were unprepared to support the hundreds of thousands of older homeowners whose reverse mortgages the defendants were responsible for,” said CFPB Director Rohit Chopra. “The defendants ignored complaints and calls for help, and they let problems snowball into disasters. Older homeowners did not choose Sutherland and NOVAD as their reverse mortgage servicer, and the CFPB is holding these defendants accountable for their unlawful neglect.”

What’s next: Sutherland must pay $11.5 million to reverse mortgage borrowers financially harmed by the company’s activities and a civil penalty of $5 million to the CFPB’s victims’ relief fund. Due to NOVAD’s declaration of an inability to pay, the order requires NOVAD to pay $1 to the CFPB’s victims relief fund.

Published by

Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.