A property inspection fee class action lawsuit investigation is underway that is scrutinizing the habits of a handful of mortgagees with respect to unnecessary evaluations of homes. According to this investigation, some mortgage lenders order unnecessary inspections of properties whose owners are behind in their monthly loan payments, then stick the owners with the bill for the property inspection fee.
The six mortgage lenders that are currently being investigated are Caliber Home Loans Inc., Flagstar, Freedom Mortgage, LoanDepot, Quicken Loans and U.S. Bank. The problem of ordering an excessive number of random property evaluations is that the lender charges the property inspection fee to the defaulting homeowner putting him or her further in debt and reducing their equity.
There’s More than One Way to Default
Defaulting on a home loan may be as simple as getting behind on payments through the loss of a job. It doesn’t mean that the mortgage borrower intends to completely allow the home to go into foreclosure. In fact, it is more common for borrowers to make every attempt to regain their footing and catch up on payments.
In the case of reverse mortgages where a senior citizen is no longer required to make monthly loan payments but utilizes the equity in their home to satisfy this requirement, default can occur when the elderly person fails to pay property taxes or home insurance—which are both requirements of such a contract.
Regardless of how a borrower defaults, a lender needs to protect their interest in a property by determining if a home in default is still occupied and is being maintained in such a way as to uphold its market value. This is the purpose of property inspections.
A Property Inspection Fee Can Generate Bank Income Over Time
According to a property inspection fee lawsuit filed in February 2017 against Nationstar, an elderly reverse mortgage contract holder was subject to an assessment of five $20 property inspection fee incidents during one month in November 2016. These five property inspection fee charges totaled $100 and were passed onto to the elderly plaintiff by being added to her loan balance.
The frequency with which the inspections were ordered and done were purportedly against the regulations of the Housing and Urban Development (HUD) Guidelines. These guidelines allow for inspections to occur once every 25 days at most when the loan or contract is otherwise in default and the purpose is to determine that the home is occupied and reasonably cared for.
The property inspections were allegedly done without notice to the borrower, which is also against HUD regulations. The federal agency specifies that a home loan lender must make every attempt to contact the debtor and offer a reason as to why the inspection is necessary and reasonable.
The plaintiff alleges that charges for these drive-by inspections in which she was not forewarned were generated and couched on her statements as “other fees.” The charges decreased her equity over time and added to the banks profit, providing unjust enrichment.
Have you gotten behind in your home loan payments and been subject to unreasonable property inspection charges? You may be able to join this class action lawsuit investigation. Fill out our form to request a free initial consultation.
The Nationstar Mortgage Lawsuit is Case No. 1:17-cv-01373 in U.S. District Court for the Northern District of Illinois, Eastern Division
Join a Free Property Inspection & Broker Price Opinion Class Action Lawsuit Investigation
If you were in default on your mortgage in the last three years with one of the following banks, you may qualify to join this property inspection fee class action lawsuit investigation:
- Caliber Home Loans
- Flagstar
- Freedom Mortgage
- LoanDepot
- Quicken Loans
- U.S. Bank
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27 thoughts onProperty Inspection Fee May Violate Mortgage Terms, Federal Regulations
I just spoke to Mr Cooper and they are trying to charge me $110 for an insptection.
I did not agree to this or sign anything about this so I refuse to pay it.
How can they do this without consulting you?
Got 2 months behind in mortgage and Pennymac keeps sending this person to my home scaring my fiance to death rude as well I always catch up and have lived in my home 21 yrs since I built but he cont to show up and discus my personal business with my spouse who is not on the loan at all , I keep getting $30 fees put on my bill every other month currently I am less than 30 days behind and am resolving that will be resolved soon but I have kept my home up maticulously since building but coming on my property and being rude and discussing my business with my Fiance an getting them upset setting in my driveway in car and sometimes sets there for along time, should not be allowed. This is my home and I am sick of this mortgage company(Pennymac) keeping me very upset so i cannot do my job as a critical care nurse and trying to cont to bury me in fees.
I have Penny Mac as well and deal with this on a monthly basis. I’ve googled if they have had previous lawsuits filled against them for this and I go off on them all the time for it. My fees go from $20-$80 and I’ve never not once seen an inspection done. They can’t get out on my property as it is posted private property everywhere and that we will stand our ground and protect what is ours but I’ve never noticed a drive by either. But I have brought it to their attention that one bill had three of them on it. And for three of them to be on it , it ment they are claiming someone came by here three times. And what makes me mad is sometimes I won’t even be late. They put some of my money in the suspense account on their own when it is paid and full and I still get hit with the inspection fee. My bills even says that if there’s extra money sent that they will apply it where deemed necessary but I find it in suspense account all the time. They have treated me with foreclosure for being 20 something days late and I eventually find my money sitting in the suspense account. Atleast $400 of it. I told them they were crooks and idk how they sleep at night. But the inspector telling your partner your business is unethical and filates the privacy protection order of you. I would def voice that concern. I HATE penny Mac but want to wish you the best
Yess add Penny Mac and it’s a HUD mortgage loan and they are doing them EVERY month. Also don’t stay the same price. I’ve never been told they were charging me for them or why. It also says I’m accruing fees too. Some say insufficient funds which is 10000% false. Then I’m confused why they are adding fees instead of taking money out of my suspense account since I pay extra each month. Worse mortgage company ever!
Mr. Cooper keeps charging me $30.00 every month for inspection
I am fighting my mortgager also. They add escrow charges the whole year I already had insurance then held my money for 9 months. Then they started charging me 30 each month for inspection fees. I paid my house payment but because they added the escrow they held it and said I didn’t pay the right amount. Then they charged me late fees. Then they refused my payment saying I had to pay the escrow or they wouldn’t except it. Now they r trying to foreclose on me