Carrington Class Action Filed Over Mortgage Online Payment Fee

Unfortunately, nefarious collection practices are common in the mortgage industry. In a recent lawsuit, borrowers allege that Carrington Mortgage Services, one of the largest residential mortgage servicers in the country, has been charging a mortgage online payment fee for online transactions despite such a fee not being included in the mortgage agreement.

Especially in times of crisis, it’s hard to deny that lending and borrowing are necessary evils of the United States economy. However, that doesn’t mean that these practices shouldn’t be regulated. In Florida, the collections practices taken by lenders are regulated by laws including the Florida Consumer Collection Practices Act (FCCPA). Under this law, lenders are limited in the additional charges they can place on mortgages, including in the form of a mortgage online payment fee.

When agencies break these laws, consumers can fight back.  In the case of Carrington Mortgage, a class action lawsuit was filed: Victoria Dawkins v. Carrington Mortgage Services LLC, Case No. 0:20-cv-60998-RAR. Dawkins is filing on behalf of herself and all others similarly situated. The suit was filed on May 20, 2020, in the United States District Court for the Southern District of Florida.

Carrington Pay-to-Pay Fees

According to the lawsuit, Carrington illegally charges a $5.00 fee for each online payment, as well as $10.00 to $20.00 for each payment made over the phone. The suit claims that Carrington is meant to be compensated for their services through interest charged on the borrower’s debt. Despite this, borrowers were charged for online payments made via Quick Pay, a payment processing system by Western Union.

According to the suit, Carrington pays Western Union $0.50 or less for each of these transactions and keeps the difference, $4.50, for itself.

While Carrington is allowed under the law to charge borrowers the actual cost of services, the suit alleges that the average mortgage online payment fee charged for these services far exceeds that actual cost. Moreover, fees not posted in an agreement may constitute hidden fees, and be in violation of consumer protection laws.

Mortgage Online Payment Fee Laws

The behavior of borrowers such as Carrington is regulated by the (FCCPA). Under the FCCPA, lenders can’t use specific practices including threats of force, harassment of the debtor or their family, and implications of any kind that they are representing an attorney. Most importantly, the FCCPA restricts lenders from attempting to “claim, attempt, or threaten to enforce a debt when such person knows that the debt is not legitimate”. 

The second law cited by the lawsuit is the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). Under this law, lenders are restricted from using “unfair methods of competition, unconscionable acts or practices, or unfair or deceptive acts or practices in the conduct of any trade or commerce”. According to the suit, “unfair” acts include those which are “substantially injurious” and “not outweighed by any countervailing benefits”. The suit’s argument is that the Carrington mortgage online payment fee constitutes such an unfair act.

Finally, the suit argues that, because Carrington is a Department of Housing and Urban Development (HUD) approved lender, it is subject to all HUD regulations. This includes a restriction on the types and amounts of fees a lender can charge. Specifically, fees charged by lenders must meet three requirements including being “based on the actual cost of the work performed or actual out-of-pocket expenses”.

Should You Join a Mortgage Online Payment Fee Class Action Suit?

According to the Florida Office of Financial Regulation (FLOFR), for those who feel their lender has violated the FCCPA there are a few actions they can take to seek justice and compensation. First, borrowers can file a complaint with FLOFR. However, FLOFR makes clear that filing a complaint is not a way to seek compensation.

To seek recompense, borrowers need to take legal action. Filing civil actions of this type may be contingent on a tight timeline, so it is recommended that you seek legal counsel and file as soon as possible, according to the FLOFR.

Pursuing litigation can be initimidating, so Top Class Actions can help to connect you with an experienced consumer protection lawyer who can verify whether or not your mortgage servicer was in violation of your existing agreement at the time that you were charged additional fees.

Join a Free Mortgage Payment Fee Class Action Lawsuit Investigation

If you were charged a convenience fee for paying your mortgage online or over the phone, you may qualify to join this mortgage payment fee class action lawsuit investigation.

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This article is not legal advice. It is presented
for informational purposes only.