Nationstar Avoids Reverse Mortgage Flood Insurance Claim

Nationstar Mortgage LLC doesn’t have to face a Fair Debt Collection Practices Act class suit related to its purchase of flood insurance for homes carrying reverse mortgages, the Eleventh Circuit said May 8.

The FDCPA doesn’t apply because Nationstar didn’t try to collect a debt and isn’t a debt collector, the unpublished per curiam opinion said.

In a reverse mortgage, a borrower receives a loan, secured by their home, that is paid off when the home is sold or the borrower dies, the court said. Borrowers aren’t required to make monthly payments, but interest accrues and mortgage insurance premiums are ...