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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
We are victims of PHH Mortgage also, stole our money, home and lives, fraudulent documents, eight years of hell from this company, someone is on the take for sure, even the judge presiding ignored my proof of payments and took their fraudulent mortgage history submitted. We need help too!….contact me anytime.
My house has been on the market trying for a short sale but they keep denying all the many offers I receive. This has been going on for over 8 years. Fannie Mae was even involved on the last offer and all PHH had to do was set up a closing date but instead sold my account to another company. I have been trying to get an attorney to sue PHH and HSBC for furthering my hardship. I have health issues and it seems they want to make it worse with all the added stress. I can’t get around easily to keep sending in all the required documents. They know all this but they don’t care.
We had the same issues with phh. Listed the house for a short sale had an all cash offer for the Houston month before sheriff sale date but they intentionally ignored the offer and let the home go to sheriffs sale. SIGN ME UP
House not houston
HSBC has nothing to do with your taxes going up, that is the town or city you live in. And check your rate… Are you in and Adjustable Rate Mortgage? That is the only way your rate will go up with a first mortgage.
Margo….with your head up your ass….PHH are crooks….they raised our payment $2400/year for taxes already paid….don’t even mess with anyone on this sight….mostly victims of PHH…..PHH charges fees, home inspection fee anywhere from $13 to $896…..PHH took our $35,000 and home…our retirement and eight years of our lives….I will continue to sue them until the day I die….someone will pay for this!
I need to join the class action suites, HSBC sold our mortgage to Caliber Home Loans while in a foreclosure defense. As a resulted we still owed more than the property worth, that including illegal and interests fees.
I NEED TO JOIN THE CLASS ACTION SUITE WHERE DO I SIGN UP THANK YOUCHARES WEIKEL602-690-0798
I had a different problem with HSBC. They are dishonest and so are their employees. My husband set several accounts overseas with HSBC and then transferred all our money to other countries. He has asked for divorce, and I can not trace the money. It even shows that i have signed and authorized the account to be opened, when I did not even know this bank. Anyone can recommend a lawyer on contingency fee? My husband of over 30 years, left me without any social security, pension etc… The money is gone, thanks to HSBC. I appreciate any referral. Thank you
Phh are scammers and should be shut down am having same problem how do I join the class action suit
We had a lot of problems with HSBC, increase interest rate, increase taxes in short I have to get into this lawsuit.
I would like to join this suit I’m in default foreclosure I have tried to work with them on loan modifications only resulting in higher mortgage payments never reducing my interest rate keeping me at 7.75 interest rate . I lost wages currently in divorce and now they are tacking on all these fees inspections landscaping fees cleanup never wanted to help me stay ony home with a lower payment and interest rate
Andrew, HSBC will not modify my rate(8.5%) ever! They give you the run around for months. Repeatedly asking for the same info(bank statements & tax Returns) only to stamp a denial on regardless of the numbers. Never dealt with worse people in my life. Everyone else I knoe has had their banks work with them by lowering rates, etc.. except HSBC. Any progress on your end?