Maryland regulators are getting nearly $400,000 for the state and 109 Maryland homeowners as part of a $15.5 million multistate settlement with NewRez LLC, a mortgage servicer accused of billing customers for insurance they didn’t need.
The Maryland Department of Labor’s Office of Financial Regulation joined financial regulators in 47 other states and the District of Columbia in the settlement, announced this week, resolving findings that NewRez — known to most Maryland borrowers through its Shellpoint Mortgage Servicing brand — charged homeowners for force-placed insurance even when they already had active coverage of their own. Force-placed insurance is typically arranged by a lender or servicer when a borrower’s own policy lapses or falls short, protecting the lender’s financial stake in the property, but it usually costs significantly more than coverage a homeowner secures independently. The examination behind the settlement, opened in January 2022, reviewed NewRez’s servicing practices from November 2020 through October 2021 and found violations of federal mortgage-servicing rules under the Real Estate Settlement Procedures Act.
Maryland’s share of the settlement includes nearly $98,000 in restitution split among 109 affected borrowers — an average of roughly $900 each — plus close to $300,000 in civil penalties, the ninth-highest penalty total among the 48 participating jurisdictions. Nationally, the Fort Washington, Pennsylvania-based company worked with regulators to identify the problem and has already returned $4.5 million to more than 4,200 affected borrowers, on top of nearly $11 million in additional costs and penalties. Commissioner of Financial Regulation Antonio Salazar said the settlement “holds NewRez accountable and puts real money back in the pockets of Maryland homeowners.”
Beyond the payout, NewRez agreed to ongoing oversight: the company must conduct monthly testing of newly boarded loans carrying force-placed insurance for at least a year, checking whether those borrowers actually had valid coverage when the charges were assessed, and must report to regulators and take corrective action if more than 5% of tested loans turn up errors. Quarterly compliance updates are required until every affected consumer has been made whole, and a portion of the settlement remains suspended pending NewRez’s demonstrated compliance with those terms.
Not every state signed on. Washington’s Department of Financial Institutions opted out of the multistate deal, telling trade publication Scotsman Guide it has its own pending case against NewRez covering the force-placed insurance issue “and significant other alleged violations of Washington state law,” suggesting the company’s regulatory exposure on this issue isn’t fully closed out nationally even with this settlement in place.
Maryland officials framed the NewRez case as part of a broader enforcement push. The Office of Financial Regulation’s enforcement work in the fiscal year that ended in mid-2025 produced $792,750 in penalties and $4 million in ordered restitution for Maryland consumers, on top of more than $2.2 million in the state’s combined share from two other multistate settlements this year — a $20 million cybersecurity settlement with Bayview Asset Management and a separate settlement with Block, Inc. — plus participation in a 22-state action against a mortgage loan originator.
Maryland residents with questions about the settlement can contact Assistant Commissioner of Enforcement Dana Allen at dana.allen@maryland.gov, or use the NMLS Consumer Access website to verify a company’s Maryland license and review its enforcement history.
