On October 10, 2023, the CFPB filed a lawsuit in federal court, alleging that Freedom Mortgage Corporation submitted legally-required mortgage loan data that was riddled with errors, violating both the Home Mortgage Disclosure Act (HMDA) and a 2019 consent order. It can be recalled that in August 2023 the CFPB fined Freedom $1.75 million for paying illegal kickbacks for mortgage loan referrals.
Freedom Mortgage Corporation is a privately held nonbank mortgage loan originator and servicer. In 2019, the CFPB found that Freedom Mortgage had intentionally misreported HMDA data about applicants’ race and ethnicity and the company consented to an order that required it to improve its compliance management system and avoid future HMDA violations, among others. However, the CFPB recently found reason to believe that the HMDA data Freedom Mortgage submitted for 2020 contained widespread errors across multiple data fields, and that the errors constitute violations of HMDA and the 2019 order.
In particular, the CFPB alleges that Freedom:
Reported information to regulators with widespread inaccuracies. After the CFPB found 51 errors in an initial review of 159 files in Freedom’s 2020 submission, the company had to resubmit its data. In that resubmission, Freedom corrected errors in 35 different required HMDA data fields—this reflects errors in over 174,000 data entries affecting nearly 20 percent of Freedom’s mortgage loan applications.
Freedom violated a 2019 law enforcement order. Freedom failed to clean up its deficient data practices and continued to provide federal regulators with error-ridden data.
Read the CFPB’s press release here.
The consent order can be found here.