CFPB Files Complaint Against Mortgage Originator For Allegedly Inaccurate HMDA Reporting – Charges, Mortgages, Indemnities

On October 10, 2023, the Consumer Financial Protection Bureau
(CFPB) announced that it filed a complaint against a residential mortgage loan
originator and servicer alleging that the company violated the Home
Mortgage Disclosure Act (HMDA), its implementing Regulation C, the
Consumer Financial Protection Act (CFPA), and a recent 2019 consent order. The company allegedly
reported HMDA data in 2020 that contained widespread errors
throughout the legally-required submission, prompting the CFPB to
file a lawsuit in the Southern District of Florida seeking civil
penalties and injunctive relief.

The 2019 consent order alleged that the mortgage company
intentionally submitted mortgage-loan data for 2014 through 2017
that misreported certain HMDA data fields, such as applicants’
race, ethnicity, and/or sex. The settlement that accompanied the
2019 consent order required the company to pay a civil money
penalty of $1.75 million and improve its compliance management to
prevent future violations. Despite the settlement and consent
order, the CFPB alleges that in 2020, the mortgage company
“collected, recorded, and reported inaccurate HMDA data”
and “did not maintain procedures reasonably adapted to avoid
errors in its 2020 HMDA data submission.” Upon bringing this
suit, CFPB director Rohit Chopra commented “[t]he CFPB will
continue to focus on ending the cycle of misconduct by repeat
offenders in the financial industry.”

The CFPB seeks to permanently enjoin the company from violating
the above regulations, require the company to take affirmative
steps to prevent any recurrence of such violations, and to impose
civil money penalties against the company.

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