WASHINGTON (10/10/13)--Mortgage Master Inc. and Washington Federal, a Seattle-based bank, have been ordered by the Consumer Financial Protection Bureau to pay a combined $459,000 in civil penalties for alleged violations of the Home Mortgage Disclosure Act (HMDA).
The consent order follows a CFPB examination that found that Walpole, Mass., nonbank Mortgage Master "had significant data errors" in 21,015 mortgage loan applications the firm reported in 2011. Further investigation by the CFPB and the Commonwealth of Massachusetts Division of Banks found significant error rates in other HMDA filings, the agency said. A $425,000 civil penalty has been assessed against Mortgage Master.
An examination of Seattle bank Washington Federal found HMDA errors in 5,785 mortgage loan applications that were reported in 2011. The CFPB reported a $34,000 civil penalty has been assessed against Washington Federal.
The CFPB has ordered both firms to correct and resubmit their 2011 HMDA data, and develop and implement an effective HMDA compliance management system to prevent future violations.
Both entities have been taking steps to improve their HMDA compliance management systems and the accuracy of their HMDA mortgage loan information since the HMDA errors were revealed, the CFPB said.
"When financial institutions report inaccurate information, it obstructs the purpose of the Home Mortgage Disclosure Act and makes it more difficult for the CFPB to discover and stop discriminatory lending," said CFPB Director Richard Cordray. The CFPB consent orders will send "a strong signal that no mortgage lending institution--whether bank or nonbank--should be able to mislead the public with erroneous data," Cordray added.
The CFPB on Wednesday also released a new HMDA resubmission schedule and guidelines, and outlined the factors it may consider when evaluating whether to pursue a public enforcement action for HMDA violations. (See News Now story: HMDA Resubmission Schedule, Guidelines Released By CFPB.)