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Mr. Cooper Preauthorized Mortgage Transfers EFTA, RESPA Class Action

The Electronic Funds Transfer Act (EFTA) governs preauthorized transfers from bank accounts. The complaint for this class action claims that Nationstar Mortgage, LLC, which does business now as Mr. Cooper, violated both EFTA and the Real Estate Settlement Procedures Act (RESPA) in its incorrect handling of preauthorized mortgage payments from customer accounts.

Plaintiffs James and Darryl Ellis bought a home in Brown Deer, Wisconsin in August 2016. Shortly after that, they set up automatic payments with the servicer of their loan, Pacific Union Financial, LLC (PUF). The payments were to consist of half the monthly mortgage amount of $1,420.79, withdrawn from their account every other Friday.

For example, PUF took out $712.56 on December 21, 2018 and the same amount two weeks later on January 4, 2018. Payments in the same amount were also made on January 18, 2019 and February 1, 2019.

A week later, on February 8, the Ellises received a letter telling them that the servicing of their mortgage had been transferred to Mr. Cooper. This was less than the required notice period. 

The Ellises did not agree to any modification in terms of their preauthorized transfer. 

Their next payment was due to be withdrawn on Friday, February 15. Mr. Cooper made the withdrawal early, on Monday, February 11. It overdrew the Ellises’ account and incurred an overdraft fee of $34. James Ellis contacted the company. He was told that the company would correct the problem and was sent a $34 check to cover the overdraft fee.

Unfortunately, Mr. Cooper did not stick to the schedule. It made the March 15 transfer on March 18 and the March 29 payment on April 1. These did not cause overdrafts. However, the following day, April 2, the company took $1,469.77 out of their account—more than a full month’s mortgage payment. This unexpected and unauthorized withdrawal caused three other transactions in the account to be charged overdraft fees of $34 each.

When the Ellises complained, the company refunded $770—only half of the unauthorized transfer plus a single overdraft fee. 

Four classes have been proposed for this action. 

  • The Nationwide Notice of Transfer Letter Class is all natural persons in the US who mortgage loan servicing rights were transferred from PUF to Mr. Cooper, and to whom neither company mailed a Notice of Transfer of Servicing Rights at least 15 days before the effective date of the transfer.
  • The Nationwide Unauthorized Funds Transfer Class is all natural persons in the US whose mortgage loan servicing rights were transferred to Mr. Cooper, who had executed an electronic funds transfer authorization with the prior service, and from whom Mr. Cooper initiated electronic funds transfers that were not in accord with the agreed-to funds transfers.
  • There is also a Wisconsin Notice of Transfer Letter Class and a Wisconsin Unauthorized Funds Transfer Class, both of which are similar to the nationwide classes except that they are for natural persons in Wisconsin.
Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Mr. Cooper Preauthorized Mortgage Transfers EFTA, RESPA Complaint

May 6, 2019

The Electronic Funds Transfer Act (EFTA) governs preauthorized transfers from bank accounts. The complaint for this class action claims that Nationstar Mortgage, LLC, which does business now as Mr. Cooper, violated both EFTA and the Real Estate Settlement Procedures Act (RESPA) in its incorrect handling of preauthorized mortgage payments from customer accounts.

nationstar_efta_respa_complaint.pdf

Case Event History

Mr. Cooper Preauthorized Mortgage Transfers EFTA, RESPA Complaint

May 6, 2019

The Electronic Funds Transfer Act (EFTA) governs preauthorized transfers from bank accounts. The complaint for this class action claims that Nationstar Mortgage, LLC, which does business now as Mr. Cooper, violated both EFTA and the Real Estate Settlement Procedures Act (RESPA) in its incorrect handling of preauthorized mortgage payments from customer accounts.

nationstar_efta_respa_complaint.pdf
Tags: EFTA, Mortgage-Related Unfair Practices, Overdraft Fees, RESPA, Servicing Your Mortgage