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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.
45 thoughts onHSBC, PHH Hit With Class Action Over Unnecessary Mortgage Fees
Am currently being defrauded by HSBC/PHH. They strung me along for 3 YEARS asking me for info I already delivered to them for loan modification. They lied and withheld info from me, never intending to give me the loan mod. This dual tracking/fraud was supposed to have ceased after DOJ required them to pay $40 million but still it continues.
I’m in the process of court action in Delaware for modification fraud vs HFC/HSBC, LSF9 & Caliber Home Loans.
How do I join the Class Action against HFC mortgage fees frauds
The case is still moving through the courts and has not yet reached a settlement. Claim forms are usually not made available to consumers until after a court approved settlement is reached. We recommend you sign up for a free account at TopClassActions.com and follow the case. We will update the article with any major case developments or settlement news! Setting up a free account with Top Class Actions will allow you to receive instant updates on ANY article that you ‘Follow’ on our website. A link to creating an account may be found here: https://topclassactions.com/signup/. You can then ‘Follow’ the article above, and get notified immediately when we post updates!
I am looking for representation. It is next to impossible to get to discuss your loan with them. I hires a lawyer and he got no where and I got another bill. HFC was choosing on their to pay my property taxes and roll payments to the back of my mortgage without authorization. In addition they have charged me approximately $28,000 in daily penelties.
Now HFC has sent my loan to another “debit collector” and even they can not get the paperwork that shows I approved them putting 21 payments on the back of my loan.
Please help or refer me to someone who has successfully held the, accountable.
We offer a submission form on our website for you to fill out if you are seeking class action legal help. Attorneys will then review your submission to determine if you have a case. If they feel you qualify, they will contact you directly. You can submit your information here: https://topclassactions.com/start-a-class-action/. You may want to consult your own attorney, and should you choose to go that route, we recommend checking out http://www.consumeradvocates.org/find-an-attorney. Once there, you will be able to search a broad database of specialized attorneys in your area that you may consult.
We wish you the best of luck in your pursuit of justice!
Where do you join this mortgage fraud
I want to be part of this they stole my home in 2010
How did i become part of this.
I would also like to join this lawsuit. Dealing with HSBC who transferred my loan to PHH
I would love to jump on board with the class action lawsuit against HSBC!!!!
If there is a class action suit, I would like to know about it.
we were denied redemption, we were also offered by their attorney Michael Herzoff, Detroit, an offer to buy OUR house back with the stipulation to sign an agreement to not sue, be part of a lawsuit, or blame PHH in anyway for our mortgage issues…..NO WAY IN HELL, PHH is the blame!!! Crooks!