Feds Go After Mortgage ‘Administrator’

     SAN FRANCISCO (CN) – An abusive “loan administrator” took tens of millions of dollars by claiming it could save homebuyers thousands of dollars on their mortgages, the Consumer Financial Protection Bureau claims in court.
     In fact, the bureau claims, the setup fees that defendant Nationwide Biweekly Administration charged for its “Interest Minimizer” program cost more money than it ever saved customers.
     The CFPB sued Ohio-based Nationwide, its president Daniel Lipsky, and the company’s subsidiary Loan Payment Administration LLC, on Monday in Federal Court.
     “The defendants know that consumers will pay more in fees than they save in interest for the first several years of the program, and that many consumers will leave the program without saving any money at all,” the CFPB said in a statement.
     About 10,000 Californians are enrolled in the program, the bureau said.
     “From August 2011 until September 2014, Nationwide collected approximately $49 million in setup fees from consumers who enrolled in the [Interest Minimizer] program for their primary mortgage,” the lawsuit states.
     The bureau said most customers send Nationwide half their monthly mortgage payments every two weeks, which leads to an additional annual monthly payment.
     The company charges nearly $1,000 to enroll in the program and about $84 in processing fees a year, according to the lawsuit.
     Two California district attorneys have also accused Nationwide of violating state fraud laws.
     Nationwide could not be reached for comment after business hours Tuesday.

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