Freedom Mortgage faces new legal woes following recent fine
The Consumer Financial Protection Bureau is suing the company over faulty loan data. In August, Freedom was fined by the CFPB for illegal kickbacks.
Freedom Mortgage continues to run afoul of the Consumer Financial Protection Bureau, which filed a lawsuit against the mortgage company in federal court today.
What is Freedom Mortgage? The company is a nonbank mortgage loan originator based in Boca Raton, Florida. In 2020, Freedom reported data on more than 700,000 mortgage loan applications.
What is the CFPB's lawsuit about? On Oct. 10, the CFPB filed a lawsuit against the company for submitting legally required mortgage loan data it claims was "riddled with errors" — a violation, the Bureau said, of the Home Mortgage Disclosure Act and a previous consent order from 2019 related to similar claims.
As part of the 2019 consent order, Freedom was required to improve its data practices, but the CFPB claims the mortgage company continues to submit incorrect data.
According to the complaint, CFPB found 51 errors in an initial review of 159 files from Freedom's 2020 data submission. After Freedom corrected and resubmitted the data, it was discovered that the company's errors had resulted in changes to 174,000 data entries affecting nearly 20% of Freedom's mortgage applications.
Didn't Freedom Mortgage have another recent run-in with the CFPB? The current lawsuit comes on the heels of another action by the CFPB. In August, the Bureau fined Freedom $1.75 million for paying illegal kickbacks for mortgage loan referrals.
In that separate case, the real estate brokerage Realty Connect was also fined $200,000 for participating in the kickback activity.
What's next? The CFPB, which has referred to Freedom as a "repeat offender," is seeking to stop this conduct and hit the company with another civil monetary penalty, according to the complaint.