Under proposed court judgment, the nonbank mortgage company would pay a $3.95 million penalty and regularly audit and correct its data

The Consumer Financial Protection Bureau (CFPB) today filed a proposed order that would require Freedom Mortgage Corporation to pay a $3.95 million penalty for submitting error-riddled mortgage loan data to federal regulators. In October 2023, the CFPB sued the nonbank mortgage company for violating both the Home Mortgage Disclosure Act (HMDA) and a 2019 CFPB order. In addition to the civil money penalty, if entered by the court, today’s proposed stipulated judgment and order will require Freedom Mortgage to regularly audit, test, and correct the company’s HMDA data.       

“Freedom Mortgage is a repeat offender that has ignored requirements to submit accurate data that help federal regulators maintain a fair home lending market," said CFPB Director Rohit Chopra. "The CFPB is making sure that Freedom Mortgage pays for their actions as well as institutes guardrails to prevent future violations.”

Freedom Mortgage Corporation is a privately held nonbank mortgage loan originator and servicer headquartered in Boca Raton, Florida. In 2020, Freedom reported HMDA data on over 700,000 mortgage loan applications and originated nearly 400,000 HMDA-reportable loans worth almost $100 billion.

The CFPB is proposing today’s order because Freedom Mortgage has submitted incorrect mortgage data in violation of HMDA, the 2019 order, and the Consumer Financial Protection Act. Freedom Mortgage’s HMDA data submission for 2020 contained widespread errors across numerous data fields because of systemic problems with its compliance management systems. The company’s HMDA violations occurred while Freedom Mortgage was subject to the 2019 law enforcement order.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against nonbank financial institutions, including non-bank mortgage companies, for violating consumer financial protection laws, regulations, and orders, such as the CFPB’s 2019 order. If entered by the court, the CFPB’s proposed stipulated judgment and order will require Freedom Mortgage to:

• Prevent future HMDA violations: The order imposes injunctive relief designed to prevent future violations of the law by requiring Freedom Mortgage to regularly audit, test, and correct the company’s HMDA data.

• Pay a $3.95 million fine: The order requires Freedom Mortgage to pay a $3.95 million penalty to the CFPB’s victims relief fund.

Read today’s proposed order.

Since 2021, the CFPB has dramatically increased its focus on repeat offenders, including entities and individuals that violate CFPB orders. The CFPB established a Repeat Offenders Unit to ensure that companies are not repeatedly violating the law. The agency has taken a substantial number of law enforcement actions against large repeat offenders. In addition, the CFPB finalized a rule to create a new registry that will compile consumer protection law enforcement orders by federal, state, and local law enforcement agencies.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.