fbpx

Kelco FCU Errors in Mortgage Accounts with Balloon Payments Class Action

This complicated case involves both individual and class concerns about mortgage payments in Maryland. The complaint alleges that Kelco Federal Credit Union misapplied payments, misreported balloon amounts, and failed to correct errors, creating ever-larger problems for the homeowners, who finally brought this case against Kelco.

The class for this action is all natural persons who have mortgage loan agreements with Kelco FCU to buy real property, where the agreement included a balloon payment within the meaning of Maryland state law and where it failed to disclose the balloon payment as required under Maryland state law.

Although the class action portion of this case (as opposed to the individual action part) concerns the balloon payment, it is difficult to separate that phase of the action from everything that led up to it.

Plaintiffs Robert and Lynne Winner took out a mortgage in 2005, and then refinanced in 2008. The second mortgage agreement had a loan amount of $63,000 with a balloon payment of $46,243 due on September 1, 2018.

Soon after they began paying the new mortgage, the Winners got permission from Kelco to make their monthly payments in two installments. However, in July 2009, Kelco began to record the payments as partial payments, charge the Winners late fees, and mark the account as being in arrears.

The complaint claims that the Winners tried to get the information adjusted, but Kelco did not cooperate. “In fact,” the complaint alleges, “Kelco took some of the mortgage payments and applied them to other accounts” such as the couple’s Visa accounts and a property tax payment. The complaint quotes an all-caps e-mail from Kelco’s Bill Smouse, saying that, “[u]ntil we get this bi-weekly thing resolved,” he’d put the remainder of one their checks in their savings account instead of on their mortgage.

The couple eventually reverted to one payment per month, but the complaint alleges that Kelco “continued adding improper late fees and other improper charges” that they did not believe they owed. Eventually, the Winners had been charged seventy-one late fees totaling more than $2,000.

The Winners tried to refinance the mortgage as the balloon payment date approached, but the negotiations went slowly, and the complaint alleges Kelco’s communications misstated the balloon due date as well as its amount. One amount was over $12,000 higher than the amount in the mortgage documents. The complaint alleges, “Kelco told the Winners that the unauthorized late fees and 2011 property taxes accounted for the inflated” amount.

At this point, the complaint says, the Winners were considered to be in default. They were sent right to cure information, but the amounts they were told would cure the default varied wildly. Eventually, Kelco rejected their attempt to cure.

Since then, the Winners have disputed information related to the mortgage on their Experian credit report. Kelco has still not resolved these disputes to the Winners’ satisfaction and it has impacted their ability to obtain credit.

Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

Kelco FCU Errors in Mortgage Accounts with Balloon Payments Complaint

November 24, 2020

This complicated case involves both individual and class concerns about mortgage payments in Maryland. The complaint alleges that Kelco Federal Credit Union misapplied payments, misreported balloon amounts, and failed to correct errors, creating ever-larger problems for the homeowners, who finally brought this case against Kelco.

Kelco FCU Errors in Mortgage Accounts with Balloon Payments Complaint

Case Event History

Kelco FCU Errors in Mortgage Accounts with Balloon Payments Complaint

November 24, 2020

This complicated case involves both individual and class concerns about mortgage payments in Maryland. The complaint alleges that Kelco Federal Credit Union misapplied payments, misreported balloon amounts, and failed to correct errors, creating ever-larger problems for the homeowners, who finally brought this case against Kelco.

Kelco FCU Errors in Mortgage Accounts with Balloon Payments Complaint
Tags: Failure to Provide Proper Info on Mortgage, Mortgage-Related Unfair Practices, Servicing Your Mortgage