In
June
2024,
the
CFPB

issued
an
order
that
permanently
bars
Pittsford,
New
York-based

Sutherland
Global
Services
and
its
subsidiaries,

Sutherland
Government
Solutions,

Sutherland
Mortgage
Services
and

NOVAD,
from
servicing
reverse
mortgages.

The
enforcement
action
stemmed
from
what
the
bureau
described
as
illegal
servicing
failures
that
harmed
older
homeowners
and
caused
some
to
fear
losing
their
homes.
NOVAD
held
HUD’s
Home
Equity
Conversion
Mortgage
(HECM)
servicing
contract
for
assigned
loans
from
2014
to
2022,
and
it
worked
with
Sutherland
to
operate
the
servicing
platform.

The
CFPB
said
the
companies
failed
to
maintain
a
proper
amount
of
staffing
to
manage
as
many
as
150,000
borrowers
per
year.
This
reportedly
led
to
widespread
communication
breakdowns,
including
delays
or
non-responses
to
borrower
requests
for
loan
payoff
statements,

foreclosure
alternatives,
lien
releases
and
general
information.

The
CFPB
said
some
borrowers
were
incorrectly
told
their
loans
were
in
default
or
that
foreclosure
was
imminent,
even
when
no
triggering
event
had
occurred.

Under
federal
law,
mortgage
servicers
are
required
to
respond
to
consumers
in
a
timely
manner,
a
requirement
the
CFPB
said
is
particularly
important
for
reverse
mortgage
borrowers,
who
remain
responsible
for

property
taxes,
insurance
and
other
obligations.

The
bureau
said
the
companies’
failures
caused
financial
harm
and
emotional
distress,
particularly
among
senior
homeowners.
As
a
result,
the
companies
are
required
to
pay
$11.5
million
in
restitution
to
borrowers
harmed
by
their
servicing
practices.

The
CFPB
has
hired

Rust
Consulting
to
administer
the
restitution
payments
and
respond
to
consumer
inquiries
related
to
the
case.
Neither
the
CFPB
nor
NOVAD
and
Sutherland
Global
responded
to
requests
for
comment
from

HousingWire‘s
Reverse
Mortgage
Daily.