NewRez LLC of Fort Washington will pay a $15.5 million settlement to state financial agencies in 46 states for improperly imposing “force-placed” insurance costs on borrowers who already had active homeowners’ insurance policies.

NewRez, located at 1100 Virginia Drive, is a one of the nation’s largest mortgage servicers and is licensed to operate across all 50 states.

According to a press release issued by the District of Columbia Department of Insurance, Securities & Banking, the company worked with state regulators “to self-identify and proactively remediate more than $4.5 million to impacted borrowers, and it will pay nearly an additional $11 million for costs and penalties.”

The firm will be required to implement and conduct enhanced monitoring for loans that have force placed insurance and to strengthen internal controls and compliance processes.

The settlement resolves findings from a multistate examination of NewRez that determined the company had improperly imposed force placed insurance on more than 4,200 borrowers nationwide who had active homeowners’ insurance policies. Damages totaled approximately $4.5 million.

“When loan servicers force placed insurance on a home without a valid reason, it passes on the cost of these expensive policies directly to the homeowner while offering very little protection and undermines trust in the mortgage system,” said DC Department of Insurance, Securities and Banking Commissioner Karima Woods. “The District of Columbia led this multi-state enforcement effort to secure restitution for affected borrowers and to ensure NewRez strengthens its controls, so this does not happen again. We will continue to hold servicers accountable and protect consumers from unnecessary and costly charges.”

NewRez cooperated with the states in reaching the settlement, the press release said.