Business ProfileforFreedom Mortgage Corporation

As of July 11, 2023:

Attorney General Matthew J. Platkin and the Division of Consumer Affairs announced that a nationwide mortgage provider formerly based in New Jersey has agreed to a $502,000 settlement to resolve allegations that it violated the state’s consumer protection laws in the sale and servicing of mortgages throughout the State and beyond.

Freedom Mortgage Corp. (“Freedom Mortgage”), which maintained its headquarters in Mount Laurel, NJ, for more than a decade before moving to Florida in 2022, allegedly bombarded consumers with harassing sales calls about loan refinancing, engaged in bait-and-switch sales tactics to induce them to refinance their loans, and caused them financial harm by repeatedly failing to meet its responsibilities as a loan servicer.

The allegations stem from the Division’s review of more than 1,400 complaints from around the nation, both obtained through the Better Business Bureau and filed directly with the Division, involving conduct that occurred from January 2015 to June 2022.

In a Consent Order, Freedom Mortgage and the Division agreed to resolve the allegations and conclude the investigation without further action.

Under the terms of the settlement, Freedom Mortgage will pay $365,200 in civil penalties and $136,800 in reimbursement for the Division’s attorneys’ fees and investigative costs.  An additional $50,000 in civil penalties is suspended but will become immediately payable if Freedom Mortgage fails to comply with the settlement terms within the next year.

The settlement also provides that any consumer complaint received by the Division within the next year be forwarded to Freedom Mortgage for resolution and, if not resolved, to the Division’s Alternative Dispute Resolution Unit for binding arbitration. Additionally, within 30 days of the filing of the Consent Order, Freedom Mortgage must designate an employee to serve as the company’s Complaint Coordinator for a period of 18 months. During this time, the Complaint Coordinator will be responsible for ensuring Freedom Mortgage complies with the terms of the Consent Order and all applicable consumer protection laws and regulations.  The Complaint Coordinator will also be responsible for providing the Division with written quarterly reports summarizing additional complaints received or resolved by Freedom Mortgage.

The Division found that Freedom Mortgage violated the New Jersey Consumer Fraud Act (“CFA”), the Advertising Regulations, and the Telemarketing Do Not Call Law and related regulations by:

• making unsolicited telemarketing sales calls to consumers despite not being registered with the Division as a telemarketer;
• engaging in abusive and deceptive telemarketing practices, primarily involving multiple refinancing solicitations;
• engaging in “bait-and-switch” sales tactics, such as inducing consumers to refinance their loans at lower rates only to raise the rates after consumers sign the refinancing documents;
• failing to timely disburse payments from escrow;
• failing to apply consumers’ mortgage loan payments in a timely manner, or at all, resulting in negative credit reporting for consumers, as well as late fees;
• failing to timely issue escrow refunds to consumers; and
• failing to respond to consumer inquiries with accurate information.

LINK: https://www.njoag.gov/ag-platkin-and-the-division-of-consumer-affairs-announce-502000-settlement-with-freedom-mortgage-corp/

As of October 10, 2023

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit in federal court, alleging that Freedom Mortgage Corporation submitted legally-required mortgage loan data that was riddled with errors. The CFPB alleges that Freedom’s practices violate both the Home Mortgage Disclosure Act (HMDA) and a 2019 consent order. In a recent separate matter, in August 2023 the CFPB fined Freedom $1.75 million for paying illegal kickbacks for mortgage loan referrals.

Freedom Mortgage Corporation is a privately held nonbank mortgage loan originator and servicer headquartered in Boca Raton, Florida. In 2020, Freedom reported HMDA data on over 700,000 mortgage loan applications and originated nearly 400,000 HMDA-reportable loans worth almost $100 billion.

Under HMDA, mortgage lenders are required to report information about loan applications and originations to the CFPB and other federal regulators. HMDA data are the most comprehensive source of publicly available information on the U.S. mortgage market. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities, and to identify possible discriminatory lending patterns.

The lawsuit filed alleges that the HMDA data Freedom submitted for 2020 contained widespread errors across multiple data fields, and that the errors constitute violations of HMDA, the Consumer Financial Protection Act, and the 2019 order.

Specifically, the CFPB alleges:

• Freedom reported information to regulators with widespread inaccuracies: After the CFPB found 51 errors in an initial review of 159 files in Freedom’s 2020 submission, the company had to resubmit its data. In that resubmission, Freedom corrected errors in 35 different required HMDA data fields—this reflects errors in over 174,000 data entries affecting nearly 20 percent of Freedom’s mortgage loan applications.
• Freedom violated a 2019 law enforcement order: Freedom was ordered in 2019 to clean up its deficient data practices, but failed to do so. Instead, it continued to provide federal regulators with error-ridden data.

LINK: https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-repeat-offender-freedom-mortgage-corporation-for-providing-false-information-to-federal-regulators/