Mortgage-Related Unfair Practices
New Penn Financial, LLC, which does business as Shellpoint Mortgage Servicing, has elected to settle a class action on the subject of LPI. LPI, or lender-placed insurance, is hazard, flood, or wind insurance placed on a borrower’s property to protect the value of the property when the borrower’s own policy lapses or when the borrower does not maintain adequate insurance.
When plaintiff Nicholas Parrino had family medical problems and was no longer able to pay his mortgage, he decided to arrange a short sale to limit his losses. Although he found a buyer, he claims that Nationstar Mortgage, LLC and Xome, Inc. prevented him from selling by requiring that he participate in a program that made the sale impossible. In this class action, he and another plaintiff with a similar experience sue the two companies.
When a bank’s mortgage contract says that a borrower will not incur any prepayment penalty if they pay the loan off early, what does that include? Is a transfer fee a penalty? The complaint for this class action says it is and claims that JPMorgan Chase Bank, NA violates its own mortgage contracts by charging this fee when a mortgage is refinanced.
The Electronic Funds Transfer Act (EFTA) governs preauthorized transfers from bank accounts. The complaint for this class action claims that Nationstar Mortgage, LLC, which does business now as Mr. Cooper, violated both EFTA and the Real Estate Settlement Procedures Act (RESPA) in its incorrect handling of preauthorized mortgage payments from customer accounts.
The complaint for this class action alleges that Freedom Mortgage Corporation charges borrowers who default for unnecessary property inspections. The complaint alleges that this violates the mortgage agreements, which only allow for fees for services that are “reasonable and appropriate.”
In 2018, Wells Fargo revealed that “a calculation error” in the software it used to for the modification of mortgage loans. That error resulted in 870 homeowners being denied mortgage modifications they should have gotten. This class action is brought by a couple who were among those wrongly denied a modification.
Plaintiffs Clyde and Michelle Igarashi claim that their home was illegally foreclosed on by parties who did not own their mortgage. The central allegations in this class action involve a long list of defendants and the ways that the turning of mortgages into mortgage-backed securities (MBSs) or “trusts” has led to a clouding of title and improper foreclosures in Hawaii.
When individuals or companies are in bankruptcy, the law protects them from attempts to collect on debts that were undertaken before the bankruptcy case. Debt collectors may also not attempt to collect debts that have been settled via a bankruptcy. The complaint for this class action claims that Shellpoint Mortgage Servicing ignored a bankruptcy plan that included a property it believed it was servicing. The complaint claims that Shellpoint violated the Fair Debt Collection Practices Act (FDCPA).
Maryland law forbids lenders from charging borrowers an inspection fee in relation to a mortgage loan secured by residential real property. The complaint for this class action claims that the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, did exactly that in connection with the plaintiffs’ mortgage loan.
Mortgage companies often maintain escrow accounts for customers, holding sums collected with monthly payments and from which they pay certain expenses once or twice a year. The complaint for this class action alleges that Citibank, NA violates New York and other state laws by not paying at least 2% interest on these escrow accounts to the borrowers.