Newrez Settled Improper Insurance Charges for $15.5 Million
The mortgage servicer reached a settlement to compensate over 4,200 borrowers wrongly charged for forced insurance.
Updated on Sept. 28, 2026 in Insurance
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Mortgage servicer Newrez has agreed to a $15.5 million settlement with regulators across 47 jurisdictions to resolve claims that it improperly charged homeowners for force-placed insurance. The agreement follows a multi-state investigation into mortgage servicing activities that harmed more than 4,200 borrowers nationwide.
Why it matters
The settlement addresses failures to comply with federal protections under the Real Estate Settlement Procedures Act and Regulation X. By resolving these violations, the company aims to rectify improper fee collections and ensure adherence to lending oversight standards going forward.
The $15.5 million settlement includes $4.5 million in estimated consumer restitution for 4,231 impacted loans. In Rhode Island alone, 13 affected borrowers received a combined $13,893, while the state collected $77,086 in administrative penalties.
The players
Newrez
A mortgage servicing company that manages loan accounts and collects payments from homeowners.
The details
Regulators initiated an examination in January 2022 after discovering that Newrez failed to comply with consumer protection regulations regarding force-placed insurance. This insurance is typically applied by servicers when a borrower's policy lapses, but regulators found the charges were improperly handled. As part of the settlement, Newrez is required to perform a comprehensive self-audit of fees collected since January 1, 2023, and provide quarterly reports on remediation efforts for one year.
Timeline
Nov 1, 2020 - Oct 31, 2021: Period of examined mortgage servicing activities
January 2022: Multistate examination of Newrez initiated
Jan 1, 2023 - 2026: Period for additional company self-audit
September 28, 2026: Settlement agreement announced
Money Landscape
This settlement marks a significant enforcement action aimed at ensuring compliance with federal protections under the Real Estate Settlement Procedures Act. It follows an industry-wide trend of increased regulatory scrutiny regarding the assessment of force-placed insurance fees on mortgage accounts.
Borrowers who received communication regarding this settlement should ensure they review any restitution payments or account credits provided by the company. If you believe your mortgage account was impacted by improper insurance charges outside of this scope, speak with a qualified financial professional.
The takeaway
This settlement highlights the importance of monitoring your monthly mortgage statement for unexpected insurance or escrow fees. Review your annual escrow analysis document carefully to verify that any force-placed insurance assessments align with your actual coverage status.
Further reading
For more information on how mortgage protections work, visit our guide on Insurance.
Source note: This article includes information reported by USA TODAY.
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