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Planet Home Lending Unnecessary Home Inspections Class Action

When are mortgage lenders required or permitted to make a visual inspection of the property if the mortgage is in default? If the mortgage is insured by the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD) has a regulation that governs that situation. The complaint for this class action alleges that Planet Home Lending, LLC does not follow this regulation; it claims that Planet makes multiple unnecessary inspections—and charges for them—throughout the period of default.

FHA is a part of HUD, and mortgages insured by the FHA are governed by HUD regulations. The regulation at issue in this case says, “The mortgagee [that is, the lender], upon learning that a property … is vacant or abandoned, shall be responsible for the inspection of such property at least monthly, if the loan thereon is in default.”

But the lender can only do this if the borrower cannot be reached by phone: “When a mortgage is in default and a payment thereon is not received within 45 days of the due date, and efforts to reach the mortgagor by telephone within that period have been unsuccessful, the mortgagee shall be responsible for a visual inspection of the security property to determine whether the property is vacant.”

Also, the complaint contends, “once a property has been found to be occupied, no further inspections are required by HUD or authorized for reimbursement.”

The plaintiff in this case, Camere Solis, was charged a total of $915.50 for inspections of her home. She alleges that Planet never attempted to contact her by telephone.

She believes that Planet starts charging inspection fees for homes with FHA-insured mortgages whenever a default occurs, without trying to reach the borrower by telephone. The complaint alleges that, even if Planet discovers the property is occupied, it continues to make inspections all during the period of default.

Why would it do that? The complaint claims that Planet “uses the foreclosure process to recoup charges for its unauthorized inspection fees by either requiring mortgagors to pay the fees in order to make their loan current or through final sale of the property at the conclusion of the foreclosure proceeding.”

The complaint defines a class and a subclass for this action:

  • The National Class for Count 1, Breach of Contract, is all persons who (1) owned a home with an FHA mortgage, (2) occupied it, and (3) were charged inspection fees by Planet while still occupying that property.
  • The California Subclass for Count II, Violation of California’s Unfair Competition Law, is all persons in California who, (1) between February 8, 2017 and February 8, 2021, (2) occupied a home with an FHA mortgage, and (3) were charged inspection fees by Planet while still occupying that property.
Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

Planet Home Lending Unnecessary Home Inspections Complaint

February 8, 2021

When are mortgage lenders required or permitted to make a visual inspection of the property if the mortgage is in default? If the mortgage is insured by the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD) has a regulation that governs that situation. The complaint for this class action alleges that Planet Home Lending, LLC does not follow this regulation; it claims that Planet makes multiple unnecessary inspections—and charges for them—throughout the period of default.

Planet Home Lending Unnecessary Home Inspections Complaint

Case Event History

Planet Home Lending Unnecessary Home Inspections Complaint

February 8, 2021

When are mortgage lenders required or permitted to make a visual inspection of the property if the mortgage is in default? If the mortgage is insured by the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD) has a regulation that governs that situation. The complaint for this class action alleges that Planet Home Lending, LLC does not follow this regulation; it claims that Planet makes multiple unnecessary inspections—and charges for them—throughout the period of default.

Planet Home Lending Unnecessary Home Inspections Complaint
Tags: Inspection Fees, Mortgage-Related Unfair Practices