Washington regulators cite repeated servicing failures
More than a hundred consumer complaints have led Washington regulators to pursue a $4.175 million penalty against Newrez, LLC after it was accused of widespread servicing errors.
The Washington State Department of Financial Institutions (DFI) has filed a Statement of Charges against them, outlining alleged violations that occurred between 2021 and 2026. The agency’s review of over 125 complaints found patterns of what it described as deficient practices that may have affected borrowers across the state.
Among the issues cited were problems with foreclosure mediation, where the company is accused of not working in good faith with some homeowners. Regulators also pointed to cases involving inaccurate or misleading information and delayed responses to consumer concerns.
The filing also outlines issues in how loans were set up and managed. These include errors involving private mortgage insurance, incorrect credit reporting, and problems with escrow accounts. DFI said there were also cases where mortgage payments were applied incorrectly.
In addition, the agency alleges that escrow accounts for 62 borrowers were not handled properly, including cases where force-placed insurance was added even when homeowners already had coverage. It also said some borrowers received inaccurate mortgage statements and that the company did not respond promptly during the investigation.
“DFI closely monitors consumer complaints and takes action when serious violations are discovered. Washington homeowners rely on licensed mortgage servicers to correctly service their loans, and we will hold companies accountable when they put consumers at risk of losing their homes or when they financially harm consumers,” DFI director Charlie Clark said.
Citing alleged violations of the state’s Consumer Loan Act, DFI is seeking to require Newrez to stop the practices, fix affected accounts, and pay a $4,175,000 fine. The agency said this is among the largest penalties it has pursued outside of multi-state enforcement actions, based on the scope of the alleged violations.
