ING Direct Mortgage Class Action Lawsuit Certified

A federal judge has certified a class action lawsuit filed by ING Direct customers who claim the bank refused to honor a mortgage financing guarantee on its Easy Orange and Orange mortgage loans.

U.S. District Judge Leonard P. Stark certified a class of all individuals who bought an ING Easy Orange or Orange loan between October 1, 2005 and April 23, 2009 in the following 10 states: Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Minnesota, New Jersey, New York and Washington.

Customers allege in the ING mortgage loan class action lawsuit, originally filed in January 2011, that the bank repeatedly failed to honor its “Rate Renew Guarantee” which promised they could renew their interest rates on ING Easy Orange and ING Orange loans for a flat fee of $500 or $750 for the remaining life of the loan.

“The rate renew guarantee is extremely valuable because it allows borrowers to reset the interest rate on their mortgages at any time to take advantage of lower interest rates for a low, fixed cost, whereas resetting or refinancing most mortgages is expensive and potentially cost-prohibitive,” the ING Easy Orange class action lawsuit states.

Instead of honoring the Rate Renew Guarantee, ING instead: (1) quietly changed the “flat-fee” promised to the amount of each loan holder’s monthly mortgage payment, a difference of up to several thousands of dollar per rate renew, and (2) continually added qualification requirements to the Rate Renew Guarantee not described in its advertising, the class action lawsuit says.

“As a direct result of ING’s false and misleading statements regarding the Rate Renew Guarantee, Plaintiffs and Class members purchased Orange and Easy Orange Loans with fixed-rate terms that will expire within five or seven years of origination unless they reset or refinance, for which ING has refused to honor the Rate Renew Guarantees,” the ING Orange loan class action lawsuit states.

The ING class action lawsuit is seeking damages and a declaration that the Rate Renew Guarantee is an enforceable obligation to all holders of an ING Orange or Easy Orange Loan purchased during the Class Period.

The case is Yarger v. ING Bank, FSB d/b/a ING Direct, Case No. 11-154-LPS, U.S. District Court, District of Delaware. The Plaintiffs are represented by Jeffrey S. Goddess and P. Bradford deLeeuw of Rosenthal, Monhait & Goddess, P.A.; Jonathan Selbin, Daniel R. Leathers and Daniel M. Hutchinson of Lieff Cabraser Heimann & Bernstein LLP; and David P. Meyer  and Matthew R. Wilson of Meyer Wilson Co., LPA.

UPDATE: A federal judge preliminarily approved a $20 million class action settlement in the ING Direct Mortgage Class Action Lawsuit on May 7, 2014.