LoanCare Late Fee Class Action Settlement

LoanCare has agreed to a settlement in order to end claims that the mortgage lender improperly calculated late fees in a way that led borrowers to pay too much in late fees. In total, the value of the settlement is estimated at around $1,150,000 — LoanCare will provide benefits in the form of late fee reimbursements and corrections of accounts charged the alleged fees. 

Class Members include all those individuals who currently have or formerly had mortgage loan serviced by LoanCare that were governed by a Federal Housing Administration promissory note which limits late fees to be charged as a percentage of the principal and interest portion of the monthly payment (an amount known as P&I) and from whom LoanCare assessed and/or collected late fees based instead on a percentage of the entire monthly payment, an amount which included principal, interest, taxes, and insurance (known as PITI).

The LoanCare mortgage late fee civil action was filed by Jessica Gillespie, a Pennsylvania resident. She says that she has a mortgage loan that she obtained from the Federal Housing Administration. Gillespie explains that, in 2017, the subservicing of her loan was transferred to LoanCare LLC. 

Gillespie asserts that LoanCare breached the terms of her mortgage agreement by improperly calculating her mortgage late fees. Allegedly, the Federal Housing Administration requires late fees to be calculated only based on a percentage of the principal and interest charged to the borrower each month. However, LoanCare allegedly calculated the late fees based on a percentage of the entire monthly payment charged, an amount that not only included principal and interest but also included taxes and insurance on the mortgage.

Gillespie argues that she was financially injured by this conduct, as were many other consumers. She filed a class action lawsuit against LoanCare seeking damages on behalf of herself and other similarly affected individuals. A settlement has been reached in the case, providing benefits to the Class.

A range of benefits are offered to Class Members. Per the terms of the settlement, current mortgage loan customers with LoanCare will receive a correction on their account, which will reflect what the late fee payment should have been if it had been calculated only using a percentage of principal and interest.

These current customers will receive a credit to their account equal to the difference between what was paid in late fees and what should have been charged based only on P&I, plus two percent interest annually from May 1, 2016.

If LoanCare no longer services a Class Member’s loan, they will receive a check for the amount overpaid, equal to the difference between the paid amount calculated using PITA and the amount that allegedly should have been charged based on P&I, plus two percent interest calculated annually from May 1, 2016.

No claim form is required to receive benefits from the settlement. Class Members who remain in the Class will give up their rights to pursue independent litigation against LoanCare over the issues brought forward in the LoanCare late fee class action. 

Class Members do have the option to opt out from the settlement Class. If they choose to do so, they will receive no benefits but will retain their right to pursue independent litigation against LoanCare. The deadline to opt out is Oct. 6, 2020.

Class Members may object to the terms of the settlement by writing to the court with their objection. Class Members are invited but not required to attend a final approval hearing set for Oct. 27, 2020.

Who’s Eligible

Individuals who:

• Currently have or formerly had mortgage loan serviced by LoanCare that were governed by a Federal Housing Administration promissory note which limits late fees to be charged as a percentage of the principal and interest portion of the monthly payment (an amount known as P&I); and
• LoanCare assessed and/or collected late fees based instead on a percentage of the entire monthly payment, an amount which included principal, interest, taxes, and insurance (known as PITI).

Potential Award

Varies.

Per the terms of the settlement, current mortgage loan customers with LoanCare will receive a correction on their account, which will reflect what the late fee payment should have been if it had been assessed only using a percentage of principal and interest.

These current customers will receive a credit to their account equal to the difference between what was paid in late fees and what should have been charged based only on P&I, plus two percent interest annually from May 1, 2016.

If LoanCare no longer services your loan, you will receive a check for the amount you overpaid, equal to the difference between the paid amount calculated using PITA and the amount that allegedly should have been charged under P&I, plus two percent interest calculated annually from May 1, 2016.

Proof of Purchase

N/A

Claim Form

There is no Claim Form for this settlement. Class members with further questions can click here for more information.

Exclusion Deadline

10/6/2020

Case Name

Jessica Gillespie v. LoanCare LLC, Civil Action No. 190202806, in the Court of Common Pleas, Philadelphia County

Final Hearing

10/27/2020

Settlement Website

www.GillespievLoanCare.com

Claims Administrator

Gillespie v. LoanCare LLC Exclusions
c/o American Legal Claim Services
PO Box 23489
Jacksonville, FL 32241-3489

Class Counsel

Irv Ackelsberg
LANGER, GROGAN & DIVER PC

Defense Counsel

John C. Lynch
TROUTMAN SANDERS LLP

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