Part of BofA, Morningstar Debt Collection Lawsuit Dismissed

Bank of America and Nationstar Mortgage won most of their battle to dismiss claims against them in an unfair debt collection class action lawsuit.

Plaintiffs Sarah A. and Sarah D. allege that Bank of America “manufactured, imposed, and inflated unauthorized and improper fees in connection with mortgage loans they owned and/or serviced,” according to the unfair debt collection class action lawsuit.

Both primary plaintiffs claim to have mortgages owned by Bank of America, which then sold them to Nationstar. Sarah A. had a reverse mortgage for her condominium in 2007. The terms of the mortgage allegedly state that Sarah A. was responsible for certain payments (property tax and flood and hazard insurance), but was not required to pay property insurance as long as she fulfilled certain requirements. The plaintiff claims she made all payments on time and kept the proper insurance.

In 2009, Bank of America claimed Sarah A. had missed a payment. The bank allegedly placed the reverse mortgage loan in default and charged Sarah A. thousands to cover the insurance they purchased. Then, allegedly, Nationstar added additional charges to the loan.

Following several other events, including Sarah A.’s attempt to correct the matter, she was served a foreclosure lawsuit in January.

Sarah D. claims she also experienced unfair debt collection practices. She had a traditional mortgage which was purchased by Nationstar in 2013. It was modified in early 2014, but Nationstar later claimed that Sarah D. was short in escrow.

Her monthly payment was then increased, according to the unfair debt collection class action lawsuit. “Without formally notifying [Sarah D.] that her loan was in default, Nationstar then began to charge [Sarah D.] with several hundred dollars per month for various unauthorized and excessive fees.”
Bank of America claimed the allegations are false and that the plaintiffs “allege no facts to support an allegation that Bank of America charged additional improper fees.” The court granted Bank of America’s motion to dismiss the debt collection class action lawsuit.
However, Nationstar’s motion to dismiss the class action lawsuit was denied in part. The plaintiffs were permitted to amend earlier claims.

Many individuals may be at risk of unfair debt collection practices. The Fair Debt Collection Practices Act (FDCPA) was passed in 1978 in order to protect against practices such as false statements and deceptive practices, abusive language, or attempts to collect a debt you do not owe.

An unfair debt collection practices class action lawsuit investigation is currently underway.

This Unfair Debt Collection Class Action Lawsuit is Case No. 14-CIV-20484, in the U.S. District Court for the Southern District of Florida.

Join a Free Unfair Debt Collection Class Action Lawsuit Investigation

If a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.