During the Covid-19 pandemic, when so many people lost their incomes, or a significant part of them, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide a number of different kinds of relief. Among the different provisions, one section allows homeowners who are subject to economic hardship to ask for a forbearance on their mortgages. However, the complaint for this class action alleges that Gregory Funding, LLC misleadingly threatened borrowers with foreclosure and assessed late fees it was not entitled to charge.
The complaint quotes the law as saying that, if a borrower requests it, “forbearance shall be granted for up to 180 days, and shall be extended for an additional period of up to 180 days at the request of the borrower.”
During that time, the law says, the mortgage servicer is not to charge “fees, penalties, or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract” while the loan is in forbearance.
The Consumer Financial Protection Bureau (CFPB) added that each borrower’s interest will still accrue at its normal rate, but the servicers are not permitted to add additional fees, penalties, or interest onto the accounts during the period of forbearance.
According to the complaint, Gregory Funding violated these rules.
First, the complaint alleges, Gregory sent borrowers misleading statements noting that it could foreclose on their loan “if they failed to cure delinquencies and [the] improperly assessed late fees that accrued during their CARES Act forbearance plans by making a lump sum payment on their regular due dates…” This violated the terms of their forbearances.
Second, the complaint claims, “upon information and belief,” that Gregory did not give borrowers the full 180-day forbearance they were entitled to under the CARES Act. It alleges, “In doing so, [Gregory] misled its borrowers regarding their coverage and protections under the CARES Act forbearance programs.”
Thus, according to the complaint, Gregory violated a number of laws, including the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Rosenthal Fair Debt Collection Practices Act, and California’s Unfair Competition Law.
The complaint alleges that Gregory’s borrowers paid the illegal fees and that the purpose of this class action is both to recover the improper fees that were paid and to stop Gregory from continuing to charge them and to improperly service the accounts.
The class for this action is all persons (1) who have a residential mortgage on a property in the US (2) that is serviced or subserviced by Gregory Funding (3) who were subject to forbearance under the CARES Act, and to whom, during the period of forbearance, Gregory charged fees that were not permitted under the CARES Act.
A California Subclass has also been proposed for those in the above class whose mortgages were on a property in California.
Article Type: LawsuitTopic: Loans
Most Recent Case Event
Gregory Funding Mortgages in CARES Act Forbearance Periods Complaint
November 3, 2021
During the Covid-19 pandemic, when so many people lost their incomes, or a significant part of them, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide a number of different kinds of relief. Among the different provisions, one section allows homeowners who are subject to economic hardship to ask for a forbearance on their mortgages. However, the complaint for this class action alleges that Gregory Funding, LLC misleadingly threatened borrowers with foreclosure and assessed late fees it was not entitled to charge.
Gregory Funding Mortgages in CARES Act Forbearance Periods ComplaintCase Event History
Gregory Funding Mortgages in CARES Act Forbearance Periods Complaint
November 3, 2021
During the Covid-19 pandemic, when so many people lost their incomes, or a significant part of them, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide a number of different kinds of relief. Among the different provisions, one section allows homeowners who are subject to economic hardship to ask for a forbearance on their mortgages. However, the complaint for this class action alleges that Gregory Funding, LLC misleadingly threatened borrowers with foreclosure and assessed late fees it was not entitled to charge.
Gregory Funding Mortgages in CARES Act Forbearance Periods Complaint