PhotoThe Consumer Financial Protection Bureau (CFPB) has ordered Mortgage Master, Inc. and Washington Federal to pay civil penalties for violating the Home Mortgage Disclosure Act (HMDA), which requires mortgage lenders to accurately collect and report data about home mortgage loans.

Mortgage Master will pay $425,000 and Washington Federal will pay $34,000 in civil penalties. 

“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. “Today we are sending a strong signal that no mortgage lending institution – whether bank or nonbank – should be able to mislead the public with erroneous data.”

In 1975, Congress passed the Home Mortgage Disclosure Act requiring certain mortgage lenders to make loan information available to the public. Banks, savings associations, credit unions, and mortgage companies must disclose information about home mortgage loan applications, including information about the applications they reject. 

Mortgage Master 

According to the CFPB’s Consent Order, a CFPB exam found that Mortgage Master, a nonbank headquartered in Walpole, Mass., had significant data errors in the 21,015 mortgage loan applications it reported for 2011. The CFPB is requiring Mortgage Master to:

  • Pay a civil penalty of $425,000;
  • Correct and resubmit its 2011 HMDA data; and
  • Develop and implement an effective HMDA compliance management system to prevent future violations.

Paul Anastos, President of Mortgage Master, said the CFPB's findings were "related to administrative errors in our reporting system, and the audit confirmed that no borrowers were harmed in any way, nor did any borrowers need to be refunded.” 

"We have addressed the system issues that caused the reporting errors and we are in the process of verifying the accuracy of all data through the end of second quarter of 2013,” Anastos said.

Washington Federal 

According to the CFPB’s Consent Order, a CFPB exam found that Washington Federal, a bank headquartered in Seattle, Wash., had significant errors in the 5,785 mortgage loan applications it reported for 2011. The CFPB is requiring Washington Federal to:

  • Pay a civil penalty of $34,000;
  • Correct and resubmit its 2011 HMDA data; and
  • Develop and implement an effective HMDA compliance management system to prevent future violations.

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