Freedom Mortgage Hit With CFPB Penalty Over Faulty Loan Data

Freedom Mortgage Corp. is facing a $3.95 million penalty for inaccurately reporting mortgage loan demographic data and will have to take steps to ensure accurate reporting in the future, the Consumer Financial Protection Bureau said.

The nonbank lender violated the Home Mortgage Disclosure Act, which requires mortgage lenders to submit annual demographic data of home loan applicants, and a 2019 CFPB order that required the company to pay a $1.75 million penalty and take steps to improve data reporting, the conusmer finance watchdog said in a new proposed order Tuesday.

The CFPB also sued Freedom in 2023 after finding problems with nearly one-third of a sample of submissions taken from the lender’s 2020 HMDA data. Freedom originated almost $100 billion in HMDA-reportable loans in 2020, the CFPB said.

The bureau’s latest proposed order would require Freedom to create an HMDA compliance subcommittee, hire an HMDA auditor, and conduct quarterly testing to ensure its reported data is following the law. Freedom must also correct its HMDA data from 2021 to 2023 and create a detailed plan for complying with HMDA in the future, according to the order.

“Freedom Mortgage is a repeat offender that has ignored requirements to submit accurate data that help federal regulators maintain a fair home lending market,” CFPB Director Rohit Chopra said in a release announcing the proposed order.

The CFPB has ramped up its enforcement against “repeat offenders"—businesses that continuously break consumer finance laws and CFPB orders. The bureau created the Repeat Offender Unit in 2022 to monitor and rapidly review such businesses. It also finalized a rule earlier this month creating a registry to track repeat nonbank offenders.

Freedom couldn’t immediately be reached for comment.

The case is Consumer Financial Protection Bureau v. Freedom Mortgage Corporation, S.D. Fla., Docket No. 9:23-cv-81373-DMM, 6/18/24.