PHH Mortgage Telephone Pay-to-Pay Charges Class Action

The word “mortgage,” the complaint for this class action tells us, literally means “death pledge.” The complaint’s topic is actually slightly less dramatic: It alleges that PHH Mortgage Corporation violates various consumer-debt-related laws in charging excessive fees to borrowers who make over-the-telephone payments.

PHH is the successor in interest (after a merger) of Ocwen Loan Servicing, LLC. According to the complaint, it claims to be “one of the largest subservicers of residential mortgages in the United States.”

The complaint alleges, “PHH leverages its power and position by charging homeowners excessive fees of at least $7.50 to make a simple automated ‘over-the-phone’ or internet payment (‘Pay-to-Pay Transaction’). PHH undertakes such actions despite its uniform contractual obligations to charge only fees explicitly allowed under the mortgage, applicable law, and only those amounts actually disbursed.”

The plaintiff in this case, Danny Samuel, owns a home in California through a mortgage loan. In July 2012, Ocwen acquired the loan in default. PHH is the current servicer. A Notice of Recission was filed in December 2012. The complaint claims that Samuel has made complete and timely payments.

From time to time, he has made his mortgage payment by phone, and the complaint says that each time he has been charged a $7.50 fee.

The complaint says it is a breach of PHH’s mortgage contracts in “assessing fees to borrowers that are either not permitted by law or … expressly prohibited by their mortgage agreements.” Also, the complaint says, “[e]ven if some fees were allowed, the mortgage uniform covenants allow PHH to pass along only the actual cost of fees incurred by it to the borrower—here only a few cents, if any cost at all.”

According to the complaint, the charging of these fees also violates a number of laws:

  • The federal Fair Debt Collection Practices Act
  • The California Rosenthal Fair Debt Collection Practices Act
  • The California Unfair Competition Law
  • The California Consumer Legal Remedies Act

Furthermore, PHH is a servicer of FHA-insured loans, the complaint says, and is therefore bound by the rules and regulations of the Secretary of Housing and Urban Development (HUD), which are incorporated by reference in all FHA-insured mortgages. “Under FHA servicing rules, a mortgage servicer may not charge a borrower any fee not authorized by the FHA. The FHA has not authorized Pay-to-Pay fees.”

The Nationwide Class for this action is all persons who were borrowers on residential mortgage loans that were not owned by PHH and to which PHH acquired servicing rights when such loans were more than thirty days or more delinquent, and who paid a fee to PHH for making a loan payment by telephone, IVR, or the Internet during the applicable statutes of limitations for an FDCPA claim until the class is certified in this case.

These is also a California Class and a California Subclass.

Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

PHH Mortgage Telephone Pay-to-Pay Charges Complaint

August 11, 2020

The word “mortgage,” the complaint for this class action tells us, literally means “death pledge.” The complaint’s topic is actually slightly less dramatic: It alleges that PHH Mortgage Corporation violates various consumer-debt-related laws in charging excessive fees to borrowers who make over-the-telephone payments.

PHH Mortgage Telephone Pay-to-Pay Charges Complaint

Case Event History

PHH Mortgage Telephone Pay-to-Pay Charges Complaint

August 11, 2020

The word “mortgage,” the complaint for this class action tells us, literally means “death pledge.” The complaint’s topic is actually slightly less dramatic: It alleges that PHH Mortgage Corporation violates various consumer-debt-related laws in charging excessive fees to borrowers who make over-the-telephone payments.

PHH Mortgage Telephone Pay-to-Pay Charges Complaint
Tags: Mortgage-Related Unfair Practices, Processing or Pay-to-Pay Fees