PHH Mortgage, HSBC Bank Improper Right to Cure Notices Class Action

Foreclosures are likely to be hard to undo. Nevertheless, the complaint for this class action asks that the court “declare any foreclosure deed for [the class members in this case] null and void.” It claims that PHH Mortgage Corporation (formerly known as Ocwen Loan Servicing, LLC) and HSBC Bank USA, NA, as Trustee for Fremont Home Loan Trust 2006-E, Mortgage Backed Certificates, Series 2006-E breached the terms of mortgages and violated Massachusetts state laws in sending out mortgage default notices and right to cure letters with “materially misleading statements.”

Plaintiff Cheryl A. Smith bought a home in Ashburnham, Massachusetts on July 31, 2006. Paragraph 22 of the mortgage contains important information about acceleration and “the statutory power of sale.” Paragraph 19 contains important information about the right to reinstate after acceleration.

Sometime before March 19, 2020, PHH supposedly sent Smith a default/right to cure letter which informed her that “you can still avoid foreclosure by paying the total past due amount before a foreclosure sale takes place…”

The complaint alleges that this is incorrect because Paragraph 19 says that reinstatement must be done “prior to the earliest of: (a) five days before the sale of the Property…” It also alleges that Paragraph 22 “requires the notice state a date by which the default may be cured.” The complaint concludes that the letter is “potentially misleading and deceptive[.]”

It also alleges that the letter is misleading because Massachusetts law requires that the right to cure letter specify “the date by which the mortgagor shall cure the default to avoid … a foreclosure or other action to seize the home.” State law also says, “the Mortgagee, or anyone holding thereunder, may also provide for reinstatement of the note after the 90 day notice to cure has ended.”

The complaint alleges that Smith was thus not given a proper Notice of Right to Cure, which is an additional violation of state law. It also describes a further violation of law “for failure to first comply with the terms of the mortgage prior to exercising the power of sale, rendering any acceleration, foreclosure, and sale void.”

The complaint claims that the foreclosure sale of Smith’s home, performed on March 19, 2020, was a “void foreclosure sale.”

The class for this action is all homeowners or former homeowners who were sent default/right to cure letters by Ocwen or PHH Mortgage which say or imply that that the homeowners could pay the “total past due amount before a foreclosure sale take place … to avoid foreclosure” because the statement is potentially misleading and deceptive in omitting the five-days-prior-to-the-sale reinstatement conditions of Paragraph 19 of the mortgage as well as the date by which the default may be cured.

Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

PHH Mortgage, HSBC Bank Improper Right to Cure Notices Complaint

July 13, 2020

Foreclosures are likely to be hard to undo. Nevertheless, the complaint for this class action asks that the court “declare any foreclosure deed for [the class members in this case] null and void.” It claims that PHH Mortgage Corporation (formerly known as Ocwen Loan Servicing, LLC) and HSBC Bank USA, NA, as Trustee for Fremont Home Loan Trust 2006-E, Mortgage Backed Certificates, Series 2006-E breached the terms of mortgages and violated Massachusetts state laws in sending out mortgage default notices and right to cure letters with “materially misleading statements.”

PHH Mortgage, HSBC Bank Improper Right to Cure Notices Complaint

Case Event History

PHH Mortgage, HSBC Bank Improper Right to Cure Notices Complaint

July 13, 2020

Foreclosures are likely to be hard to undo. Nevertheless, the complaint for this class action asks that the court “declare any foreclosure deed for [the class members in this case] null and void.” It claims that PHH Mortgage Corporation (formerly known as Ocwen Loan Servicing, LLC) and HSBC Bank USA, NA, as Trustee for Fremont Home Loan Trust 2006-E, Mortgage Backed Certificates, Series 2006-E breached the terms of mortgages and violated Massachusetts state laws in sending out mortgage default notices and right to cure letters with “materially misleading statements.”

PHH Mortgage, HSBC Bank Improper Right to Cure Notices Complaint
Tags: Foreclosure, Mortgage-Related Unfair Practices