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Last Wednesday in New York, a mortgage borrower filed a class action lawsuit against HSBC Bank USA NA, PHH Mortgage Corp and their affiliates. The plaintiff alleges that the companies made use of an automatic system to charge customers in default unfair mortgage fees for that they deemed as “property protection.”
Lead plaintiff Dawn Tardibuono-Quigley claims that HSBC and PHH worked together with third-party vendors to tack on unauthorized and unnecessary charges as part of the services related to the defaulted loans. Such charges were assessed for broker price opinions (BPOs) as well as property assessments.
Rather than labeling the charges honestly, the plaintiff claims the mortgage companies used vague descriptions on the fees designed to conceal the inappropriate fees from consumers as well as from the courts. They labeled these charges, “New Fees and Charges,” “Other Fees,” Assessed Expenses,” and Tardibuono-Quigley says she found hers named “Auto Ppy Inspec,” “BPOO FLIP” and “BPO Cost.” The plaintiff claims she was charged dozens of times and the fees ranged from $10 to over $100.
When a loan normally does into default, the mortgage contract states that the mortgage servicer will pay for default-related services as needed and it is the buyer’s responsibility to reimburse the servicer. Fees are not permitted to be assessed when they are considered unreasonable or inappropriate, the class action lawsuit says.
According to the HSBC class action lawsuit, the third-party automatic software used by the defendants was essentially programmed to assess various fees at regular intervals as soon as the loan had gone into default. This may have been after a single missed payment.
Taribuono-Quigley claims that after default status is noted on an account, a property inspection is ordered and fees are assessed to the customer. Then, for every 20 to 45 days after the initial inspection, another property inspection will be triggered and assessed to the customer until the borrower is no longer in default.
The Federal Housing Administration says that only one property inspection should occur if payment is not received within 45 days of the due date and the borrower is unable to be contacted. If the inspection shows the property is occupied or confirmed as occupied via another means, then the mortgage servicer will not be reimbursed for further inspections and they are not required.
A similar process is undertaken for BPOs, according to the class action lawsuit. BPOs are conducted every several months, despite the fact that such appraisals quickly become outdated and irrelevant at the time the property is actually facing a foreclosure sale.
With the additional assessment of mortgage fees once the borrower is in default, the borrower becomes deeper and deeper into default and it makes it even harder for borrowers to get current with their loan, the class action lawsuit alleges.
Tardibuono-Quigley, on behalf of all putative Class Members represented by the class action lawsuit, requests an immediate cease of the unwarranted fees practice by the defendants as well as reimbursement for the allegedly illegally-assessed mortgage fees.
Tardibuono-Quigley is represented by Douglas Gregory Blankinship of Finkelstein Blankinship Frei, Pearson & Garber LLP.
The HSBC and PHH Mortgage Fees Class Action Lawsuit is Tardibuono-Quigley v. HSBC Mortgage Corporation (USA), et al., Case No. 7:17-cv-06940, in the U.S. District Court for the Southern District of New York.
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45 thoughts onHSBC, PHH Hit With Class Action Over Unnecessary Mortgage Fees
How do I join this suit, I’ve had the same problems.
We have had the same issue with them
My mortgage loan was sold to PHH Mortgage immediately after closing and I have had issues ever since. First they tried saying I never paid my first payment in September and therefore my automatic withdrawals never started occuring making me late for two payments. Long story short it wrecked my credit for a month, but they eventually rectified the situation before it did long term damage. Yet when they thought I was late they never even attempted to contact me to collect a payment. I never even knew until I asked. AND NOW…. I find random fees added to my monthly statement and when I inquired they replied inspection fees requested by investor. NEVER did I request these property inspections nor do I want them. Looks like it may have been an automatic fee after their system thought I defaulted, which I never did.
HSBC /HFC have been ripping off the consumers for years since 2004 how could they get away with taken advantage of hard working consumers with outrageous fees and even worst this is shown on your credit report as a bad debts I mean they have really screwed over a lot of consumers and Im one of them , if their is any justice for people like myself and any consumer who have been at the mercury of this ripp/off company then please sign -me up what a roller coaster ride with this company , and No other Mortgage Company will refinance this bad mortgage company. That tells me that the Mortgage Corp knows a lot about HSBC and its associates that we (the consumers) just dont know. R Evans (Phila Pa) Sign me up
HSBC/Beneficial charged me deferred interest during a time when I was late on my mortgage many years ago. Is there a class action suit for this?Pat D
how do i join this class action lawsuit
I’d like to join it too! They took my monthly payments for two years and applied it to the deferred interest and current interest and nothing to the principal. Among other things.
I have this problem with HSBC. How can I get an attorney to help me. I also have 24 payments at the beginning of my loan in 2004 that my payments were applied to the current interest and the deferred interest instead of the interest and principal. So I have been paying more interest than I should and my principal is higher than it should be. If there is an attorney that can help me I wish the would contact me. I have tried to get this resolved for over five years with no luck. Any thoughts??? Thanks.
HSBC also had me starving to keep my payments up. Some how my payments went up by .70cents and they held every payment there after 1270.00 every month as late because the .70 cents was not included. Bad business practice. I loss my home because of late fees and penalties even i chapter 13 with a mediators on my behalf.
Cenlar does the same thing and more. I have been fighting for months over charges of all sorts that they can not or will not send me documentation as to what for. If anyone wants to look into a Class Action against them, I am in. You can look up online and see the many many unhappy customers. I did not choose this mortgage company, my loan ended up there after my bank sold out and it got passed around to several companies before landing with Cenlar. They are the worst company I have ever dealt with. I should note, in 27 years I only became late on my payment several months ago due to them raising my monthly amount when it should have been reduces as my taxes and insurance went down. They told me they went up but they also had the documentation showing that they had went down.
Hsbc not only does that but in chapter 13 they hold payment to see if your going to make it through til the end. My inlaws had all the problems listed plus this, they owe them thousands and their not going to pay them back. They almost starved to death making the chapter 13 payments.