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Nationstar Failure To Credit Mortgage Payments Class Action

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This lawsuit alleges that residential mortgage service company Nationstar Mortgage Holdings, Inc. failed to credit payments made by borrowers, resulting in continual overstatements of outstanding loan balances on monthly mortgage statements and annual tax and interest statements, in violation of the Fair Debt Collection Practices Act.

Texas based Nationstar Mortgage Holdings, Inc. (Nationstar), is the second largest servicer of subprime mortgages nationwide.

According to the class action complaint filed  November 4, 2015 (U.S. District Court Eastern District of Pennsylvania), Pennsylvania homeowners Donald and Maria Hall defaulted on their 2005 mortgage loan while Wilshire Credit Corp. (Wilshire) was the servicer of the loan.  The Halls entered into a trial period plan (TPP) with Wilshire, pursuant to the federal Home Affordable Modification Program.  Under their TPP with Wilshire, the Halls made three trial payments in the amount of $2,512.06, during the months of October, November, and December of 2009. The three 2009 payments were never credited to the Halls’ mortgage loan account. 

When Bank of America became the loan servicer in 2010, the Halls continued making loan payments in the same amount.  Bank of America failed to credit many of these payments to their loan account, denied their request for a permanent modification and refused to accept any further mortgage payments.  In 2013, their loan was transferred to SPS, Inc., which deemed the loan to be in default on transfer to Nationstar in 2014. 

The complaint alleges Nationstar has not corrected either the failure of Wilshire or Bank of America to properly credit mortgage payments to the Halls’ loan account.  As a result, Nationstar continued to overstate mortgage loan account balances in the monthly statements it sends to borrowers and on annual tax and interest statements, as well as on credit reports and other communications with the Halls.

The complaint seeks class certification for all individuals whose mortgage loans were transferred for servicing to Nationstar while the loans were deemed to be in default and had previously been serviced by Wilshire and Bank of America while the loans were deemed to be in default.  

Nationstar’s failure to credit payments made by class members and continual overstatement of the outstanding mortgage balances on communications with class members is alleged to constitute false, deceptive, or misleading representations in connection with the collection, or attempts to collect, on their mortgage loans, in violation of the Fair Debt Collection Practices Act. 

The complaint also alleges unjust enrichment and breach of contract and seeks actual damages, including for emotional distress, statutory damages up to $1,000 individually, attorneys’ fees, and costs.

Current Case Status: 

We will update this lawsuit in early 2016.

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