News Column

Wash. State Seeks Fines Against Mortgage Transmitter

Aug 27 2013 7:09AM

C.R. Roberts

The Washington State Department of Financial Institutions announced Monday that it has issued a statement of charges against Nationwide Biweekly Administration Inc.

Nationwide is a company that accepts and transmits mortgage payments on behalf of Washington homeowners.

DFI contends that Nationwide operated without holding the required license as a money transmitter and made misleading statements to consumers, leading them to believe they would save money by having Nationwide repay their mortgage for them. As Nationwide was unlicensed, consumers were not protected by the required bonding, investments and periodic examinations required under the state's Uniform Money Services Act.

The agency seeks to impose a $150,000 fine against Nationwide as well as restitution of all fees collected, according to a DFI release Monday.

"Companies transmitting mortgage payments are uniquely positioned to cause injury to borrowers by failing to transmit borrower funds or mishandling mortgage payments, the consequences of which can be very serious to the borrower," DFI's Division of Consumer Services' Director Deborah Bortner said.

"It is critical that money transmitters handling mortgage payments comply with the law, especially our state's licensing requirements, because such requirements are in place to add a layer of consumer protection."

In its charges, DFI says that Nationwide's advertising was deceptive and misled consumers as to whom the company represented and how often their payments would be transmitted.

Consumers should use caution when dealing with any company offering to transmit mortgage payments on their behalf, and verify that any such company is licensed to do so, the release states.

"Before signing up with a mortgage payment transmitter, it is critical borrowers take time to understand the costs and benefits of the program offered and determine whether the company is properly licensed. Unlicensed money transmitters pose a serious risk to the public," said DFI Director Scott Jarvis.

DFI received a number of complaints from consumers stating that they believed Nationwide was affiliated with their lenders or with government agencies, when in fact it was not.

Consumers also complained that they did not understand the fees charged for the payment program or the frequency with which their mortgage payments would be transmitted.

The charges are not a finding or order that the respondents have actually violated the law; all named respondents have the right to request an administrative hearing on the charges, according to the DFI release.

A spokesman for Nationwide was not available Monday afternoon.

C.R. Roberts: 253-597-8535 c.r.roberts@thenewstribune.com

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(c)2013 The News Tribune (Tacoma, Wash.)

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Source: Copyright News Tribune (Tacoma, WA) 2013


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