Have you ever made a mortgage payment online or over the telephone? Were you charged a fee for it?
Many such “processing” fees are unlawful. This may be because they are not permitted under the mortgage agreement, or because they are much higher than the actual cost of processing. We’re investigating to see if a class action is needed to curb this practice.
These fees, which may also be called pay-to-pay fees, convenience fees, speedpay fees, or the like, were the subject of a warning bulletin issued by the Consumer Financial Protection Bureau (CFPB) in July 2017. The CFPB warned companies about misleading consumers about the purpose or amount of the fees, and not telling them about cheaper options.
For example, one such company claimed to charge consumers a “processing fee” of $14.95, when the fee was actually for same-day posting to the consumer’s account. Many consumers don’t need immediate posting, but the company led them to believe they had to pay simply to process the payment.
Other companies don’t disclose such fees. They don’t put them in writing, up front, and they rely on phone representatives to tell the consumer about the fees at the time of payment. When cheaper options are available, but the phone representative often does not tell the consumer.
Pay-to-pay fees are completely legal for many payment situations—for example, for buying a movie ticket online, for remitting taxes, or for paying tuition. They are often imposed for payment methods that fall outside of the business’s normal payment channels.
However, mortgages are governed by agreements that set the rules for payments and fees. Also state or federal laws may limit what companies can charge to the actual costs of processing, which may be as little as fifty cents.
A number of class actions have already been filed against this practice.
A Texas class action brought suit against servicer Arvest Central Mortgage Co., alleging that its $5-$10 fees violate Texas law forbidding mortgage servicers from charging consumers more than the amount they actually pay for processing the payment.
A Florida class action brought suit against Seterus, Inc., claiming that the fees it charges are not explicitly permitted under the law or the terms of its mortgage agreements.
We’re conducting an investigation of similar practices and the state and federal rules and law governing these practices.
If you’ve had to pay high fees to process your mortgage payment online or over the phone, you may qualify to be part of a class action. Fill out the form on this page and let us know what your experience was.