Carrington Mortgage Services Excessive Fees for Payoff Florida Class Action

This class action brings suit against Carrington Mortgage Services, LLC by the buyer of a property in foreclosure, alleging that Carrington is charging excessive fees for the payoff of the mortgage. The complaint alleges that many of the fees are excessive or fraudulent and are meant to provide extra profit to Carrington or the lender.

The plaintiff in this case, 350S Trust, bought a condominium in Miami, Florida in May 2013. It bought the property by a deed in lieu of foreclosure. The previous owner had not paid the condominium association fees, and 350S bought the property at the condominium association foreclosure sale.

The 350S Trust acquired title to the property subject to the previous owner’s mortgage, which was also undergoing a foreclosure action.

In March 2019, 350S contacted Carrington to find out what amounts were left unpaid so that it could buy the property outright. It is a violation of Florida law, the complaint says, “for the lender or its agents to deliberately inflate amounts properly due under or secured by a mortgage.”

The complaint alleges that the “Payoff Statement” given to 350S included fees that were “overstated, excessive, and non-existent.”

One example is an item listed as “Prop Pres-Pool Service” for $1,200. The complaint says this fee is fraudulent as the property does not have a separate pool, and the fees for maintaining the condominium community pool are paid by the condominium association.

Another example was named as “Other Unpaid Expenses,” with an amount over $21,000.

The 350S Trust brings suit under the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA). The complaint alleges that the letter violates the FDCPA in several respects, for example, because it does not identify itself as an attempt to collect a debt, from a debt collector. It also does not provide a validation notice telling 350S that it may dispute the amount of the debt and receive verification.

The class for this action is all persons with a Florida address to whom Carrington mailed a debt collection communication that was not returned to it as undeliverable, in connection with the collection of a consumer debt, within the applicable statutes of limitation, that did not state

1. the communication was “an attempt to collect a debt;” or
2. if the debtor notifies Carrington within thirty days after receipt of this letter that the debt, or any portion of the debt, is disputed, Carrington will obtain verification of the judgment which it will mail to the debtor; or
3. “[u]pon the debtor’s request within thirty days after receipt of this letter, Carrington will provide the debtor with the name and address of the original creditor if different from the current creditor;” and/or
4. collected or attempted to collect, using Payoff Statements that contained (a) overstated fees; or (b) fees that were not allowed under the law or mortgage agreement; or (c) fees that were fraudulent in nature, such as a pool service fee.

Article Type: Lawsuit
Topic: Consumer
Tags: FDCPA, False Representation of Debt Amount, Improper Validation Notice, Mortgage-Related Unfair Practices, Unlawful Debt Collection