TITLE: New Jersey Department of Banking and Insurance Joins $15.5 Million Settlement with Mortgage Servicer NewRez
BODY:
On August 12, 2026, the New Jersey Department of Banking and Insurance (NJDOBI), led by Acting Commissioner Susan Ochs, announced that New Jersey and 46 other state financial agencies reached a $15.5 million settlement with NewRez LLC (NMLS ID 3013), a Fort Washington, Pennsylvania-based mortgage servicer, for improperly imposing force-placed insurance on borrowers who already maintained active homeowners insurance policies.
A multistate examination discovered that NewRez had imposed force-placed insurance on more than 4,200 borrowers nationwide with active homeowners insurance policies, causing $4.5 million in consumer harm. In New Jersey specifically, 208 borrowers were impacted, receiving restitution totalling $225,783.08. Under the settlement terms, NewRez will pay $15.5 million total, comprising more than $4.5 million in proactive remediation to affected borrowers and nearly $11 million in costs and penalties. New Jersey's share of the penalty is $518,296.09. Force-placed insurance is typically imposed when a homeowner's policy is cancelled, delinquent, or insufficient in coverage and the borrower fails to secure replacement coverage. Lenders may force replacement coverage to protect their financial interest in the property, though this practice is significantly more costly than consumer-secured policies.
NewRez must implement enhanced monitoring for loans with force-placed insurance and strengthen controls to prevent future violations. The District of Columbia led the enforcement team, with assistance from Arkansas, Iowa, Massachusetts, and Montana. New Jersey residents with questions about the enforcement action may contact the NJDOBI's Consumer Inquiry and Response Center at 1-800-446-7467 or 609-292-7272, or verify company licensing through NMLS Consumer Access.