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New Penn Financial Mortgage Servicing Fee Class Action

This class action alleges that New Penn Financial, LLC, doing business as Shellpoint Mortgage Servicing, unlawfully and improperly maximized its revenue by utilizing automated computer systems to assess unnecessary and unwarranted fees on the mortgage loan accounts it was servicing, including Property Inspection fees, Property Preservation fees, Broker Price Opinion and Property Appraisal fees.

The plaintiff in this action is a resident of California and the title holder to real property located in Los Angeles County. The mortgage on that property was serviced by New Penn Financial, LLC, doing business as Shellpoint Mortgage Servicing. The defendant, New Penn Financial d/b/a/ Shellpoint ("NPF"), has its principal place of business in Plymouth Meeting, Pennsylvania and acts as a servicer for mortgage loans for various lending institutions throughout the United States. 

According to the complaint, the defendant services tens of thousands of mortgage loans and has developed, implemented and relies upon highly automated computer systems to uniformly administer daily servicing requirements on those loans. It is alleged that the defendant's computer systems employ codes and triggers allowing them to systematically automate a wide range of functions, including the assessment of certain types of fees. This occurs with virtually no human involvement or oversight of what is taking place with a given loan. 

It is alleged that once a loan is deemed delinquent within the defendant's system, a series of unwarranted fees are automatically assessed, adding them to the borrowers' outstanding balances, often placing them into deeper debt and making loan modification, reinstatement or payoff that much more difficult to achieve. The plaintiff in this case argues that she was the victim of these fraudulent and unlawful practices beginning in July of 2014 when her mortgage was characterized by the defendant as delinquent.

Once the plaintiff's mortgage fell into delinquent status with NPF, her account began to register a series of fee assessments via automated system which included Broker Price Opinion fees, Property Preservation fees, Property Inspection Fees and Appraisal fees. While these fees are typically allowed and can be made pursuant to the Deed of Trust as well as industry standards for purposes of loss mitigation in the event of delinquency, they are not expenses that should be assessed to the borrower's account on a recurring, let alone a monthly basis. This is particularly true when, as was the case with the plaintiff, the servicer has remained in regular contact with the borrower and possesses an awareness of the fact that the property continues to be occupied.

Repeated assessment of these fees, it is alleged, represents an unlawful method of maximizing the servicer's profits without regard to the rights and interests of the borrowers, in contravention of the intent of Regulation X of the 2013 Real Estate Settlement Procedures Act and Regulation Z, intended to implement the Truth in Lending Act and the Dodd-Frank Act's mortgage loan servicing provisions.

The complaint lists several counts, including violations of California's Rosenthal Debt Collection Practices Act, fraudulent concealment regarding the true nature of the fee assessments, fraudulent misrepresentation concerning justification for the charges, unjust enrichment, violation of California's Business and and Professions Code provisions regarding unfair business practices, intentional interference with contract and negligence per se related to NPF's use of automated fee assessment procedures.

As a result of NPF's actions, the plaintiff is seeking on her own behalf and on behalf of similarly situated members of the proposed class, actual, compensatory, statutory and punitive damages, restitution, disgorgement of profits stemming from the conduct described and an injunction requiring the defendant to cease and desist from charging accounts of borrowers with unnecessary and unjustified fees purportedly related to loss mitigation efforts.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

New Penn Financial Mortgage Servicing Fee Complaint

November 24, 2015

The complaint for this class action alleges that New Penn Financial, LLC, doing business as Shellpoint Mortgage Servicing, unlawfully and improperly maximized its revenue by utilizing automated computer systems to assess unnecessary and unwarranted fees on the mortgage loan accounts it was servicing, including Property Inspection fees, Property Preservation fees, Broker Price Opinion and Property Appraisal fees.

new_penn_mortage_fee_complaint.pdf

Case Event History

New Penn Financial Mortgage Servicing Fee Complaint

November 24, 2015

The complaint for this class action alleges that New Penn Financial, LLC, doing business as Shellpoint Mortgage Servicing, unlawfully and improperly maximized its revenue by utilizing automated computer systems to assess unnecessary and unwarranted fees on the mortgage loan accounts it was servicing, including Property Inspection fees, Property Preservation fees, Broker Price Opinion and Property Appraisal fees.

new_penn_mortage_fee_complaint.pdf
Tags: Mortgage-Related Unfair Practices, Servicing Your Mortgage, Your Bank