LoanCare Refusal of Requests and Erroneous Credit Reporting Class Action

When a mortgage loan is passed from one servicer to another, the transfer process may result in errors. In this case, for all of the plaintiffs, the new servicer was LoanCare, LLC. The complaint for this class action alleges that LoanCare erroneously considers them all to be in arrears, has refused to provide them with account records so they can properly contest the errors, and has given credit reporting agencies erroneous information.

The Real Estate Settlement Procedures Act (RESPA) tries “to promote borrowers’ timely access to transparent and accurate mortgage servicing practices.” In addition, the Fair Credit Reporting Act (FCRA) requires that servicers investigate problems if homeowners contest the information reported on them to credit bureaus.

Two of the four plaintiffs in this case, Ryan McClellan and Amber Goins, applied for and were granted a loan modification with their earlier servicer. In May 2019, the complaint says, they asked for “updates on the fully executed version of the loan modification.”

At that point they were told the servicing was being transferred to LoanCare and told to send their June payment to LoanCare. But LoanCare told them not to pay it yet and to call back on June 7, 2019.

LoanCare sent a notice of servicing transfer on that date, and they continued to make their modified mortgage payments. However, a year later, on June 1, 2020, they were told they were behind on their payments. McClellan called LoanCare, then called again on June 4, but the complaint alleges, “he was told to not make a payment because there was a risk that a payment could confuse the system.” Also, “[t]he LoanCare agent advised Mr. McClellan that something appeared to be wrong on LoanCare’s end…”

The complaint claims that “even though they made payments as instructed on their modified mortgage, LoanCare treated their loan as 90 or more days past due every month” and now has refused to take their monthly payments. It has been reporting their mortgage as 90 to 120 days late.

To correct the errors, they sent LoanCare qualified written requests in November 2020 and April 2021. The later one asked for certain records, including servicing notes and call recordings. LoanCare denied they had completed a loan modification and refused to give them the information they’d asked for, claiming that “this request includes confidential, proprietary or privileged information.”

Although they disputed the past-due credit reports with the credit reporting agencies, LoanCare has refused to investigate and correct its reports.

The RESPA Class for this action is all consumers who (1) between September 27, 2018 and September 27, 2021 (2) submitted qualified written requests to LoanCare at its designated address (3) requesting consumers’ servicing notes (4) which were not given to the consumer in response to the request.

The complaint include FCRA counts as well but does not define an FCRA Class.

Article Type: Lawsuit
Topic: Loans
Tags: FCRA, Failure to Provide Requested Information, Failure to properly investigate/correct errors on credit report, Mortgage-Related Unfair Practices, RESPA, Servicing Your Mortgage