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Freedom Mortgage Failure to Pay Property Taxes Class Action

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Plaintiff Stacy Chittick had made all of her mortgage payments on time, including amounts intended for her escrow account. But the complaint for this class action claims her mortgage servicer did not pay the taxes due from her escrow account on time, costing her penalties and other difficulties.

The class for this action is

  • All natural persons living in the US
  • Who had a residential mortgage loan, obtained primarily for nonbusiness purposes from any lender on real property within the US
  • For which Freedom or NYCB were the mortgage loan servicer, and
  • For which Freedom and/or NYCB failed to pay property taxes from the property owner’s escrow account, in full and on time, in 2017.

Chittick has a mortgage on her single-family home in Alexandria, Virginia. The original lender, owner, and servicer of the loan was NYCB Mortgage Company, LLC. The terms of the mortgage required her to pay an amount each month that would go into an escrow account to pay the taxes on the property.

Alexandria City requires that property taxes be paid in two installments during the year, by June 15 and November 15. NYCB made the June payment in 2017.

However, as of October 31, 2017, NYCB transferred Chittick’s mortgage to Freedom Mortgage Corporation. Chittick made her next mortgage payment, on November 3, to Freedom. The next tax payment was due November 15, and neither company paid it. The complaint claims that the escrow account held enough to pay the taxes and that the companies simply did not do it.

The complaint says that this harmed Chittick in various ways. First, the city assessed her penalties for the late payment. Second, when Chittick did her taxes, she was unable to take a deduction for the property tax because it had not yet been paid to the city. The complaint says she will not be able to recover this deduction in 2018.

Chittick tried repeatedly to get Freedom to pay her property taxes, the complaint says, but neither NYCB nor Freedom had even informed the city that Freedom was her new mortgage servicer.

Chittick refinanced with another company, the complaint says, but she has not been compensated for her inability to deduct the property taxes from her 2017 income and the refinancing itself cost her money.

The complaint says that a Virginia FOIA request has shown that NYCB and Freedom failed to pay taxes for thirteen other homeowners that same November 15. And according to the complaint, the Consumer Financial Protection Bureau has records of complaints from homeowners in other states. The complaint alleges violations of the Real Estate Settlement Procedures Act and breach of contract.

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