Rushmore Loan Management Services, LLC services home mortgages. But the complaint for this class action alleges that it violates California’s Rosenthal Fair Debt Collection Practices Act (RFDCPA) and the terms of mortgages by charging processing fees when customers make their monthly payments by telephone. These pay-to-pay fees amount to $5 when homeowners use the automated phone payment system and $10 when they pay by speaking to a customer representative.
The complaint states, “Under California law, Rushmore is not allowed to mark[ ]up the amounts it pays third parties to provide borrowers’ services and impose unauthorized charges to create a profit center for itself.” In addition, it says, the Uniform Mortgage prohibits such fees when they are prohibited by law or not expressly permitted in the mortgage contract.
According to the complaint, the fees do amount to additional profits for the company because they “far exceed[] the actual costs of the telephone transaction services Rushmore utilizes.” The complaint alleges that the actual cost to Rushmore of processing telephone payments is around fifty cents or less per transaction and that Rushmore pockets the difference.
Besides this, the complaint alleges, Rushmore’s practice violates the federal Fair Debt Collection Practices Act (FDCPA), which it says forbids “the collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”
According to the complaint, Rushmore “leverages its position of power over homeowners and demands [exhobitant] Pay-to-Pay Fees.”
Mortgage servicers are needed when the company or bank originating a mortgage is not equipped to service, or does not want to service, the mortgage loans it makes. The complaint alleges, “The mortgage lenders assign to Rushmore the right to service mortgage loans. In connection with those assignments, Rushmore assumes the rights and responsibilities under the mortgage loan contract.”
The California Class for this action is all persons (1) who have a residential mortgage loan for a property in California (2) which is serviced by Rushmore, (3) with deeds of trust incorporating standard uniform covenants from Fannie Mae, Freddie Mac, FHA, or similar government-backed model mortgages, and (4) who paid a fee to Rushmore to pay by telephone, between the applicable statute of limitation and the date the class is certified in this case.
This class includes a Rosenthal Subclass. There is also a Nationwide Federal Housing Administration (FHA) Class. For more details, see page 14 of the complaint linked below.
Article Type: LawsuitTopic: Loans
Most Recent Case Event
Rushmore Loan Management Excessive Pay-to-Pay Fees Complaint
April 2, 2021
Rushmore Loan Management Services, LLC services home mortgages. But the complaint for this class action alleges that it violates California’s Rosenthal Fair Debt Collection Practices Act (RFDCPA) and the terms of mortgages by charging processing fees when customers make their monthly payments by telephone. These pay-to-pay fees amount to $5 when homeowners use the automated phone payment system and $10 when they pay by speaking to a customer representative.
Rushmore Loan Management Excessive Pay-to-Pay Fees ComplaintCase Event History
Rushmore Loan Management Excessive Pay-to-Pay Fees Complaint
April 2, 2021
Rushmore Loan Management Services, LLC services home mortgages. But the complaint for this class action alleges that it violates California’s Rosenthal Fair Debt Collection Practices Act (RFDCPA) and the terms of mortgages by charging processing fees when customers make their monthly payments by telephone. These pay-to-pay fees amount to $5 when homeowners use the automated phone payment system and $10 when they pay by speaking to a customer representative.
Rushmore Loan Management Excessive Pay-to-Pay Fees Complaint