Lawsuit Claims PennyMac Charges Illegal Mortgage Payment by Phone Fees

According to consumer complaints, some mortgage lenders may be charging prohibited fees for people who make their mortgage payment by phone or online.

Is it Legal to Charge Fees for Making a Mortgage Payment by Phone?

In a recent class action lawsuit against PennyMac Loan Services, plaintiffs Kendra T. and Andrew B.  claim that the residential mortgage servicer may be illegally profiting by charging mortgage borrowers fees for making a mortgage payment by phone, online, or with a debit card. They claim that they have been charged fees for paying their mortgage over the phone in November 2019, December 2019, and February 2020, and that these fees are not allowed under their mortgage agreement.

In some cases, mortgage servicers disguise these fees as “processing fees.” However, this indicates that the fees are necessary in order for mortgage holders to have their payments processed. Some consumers have reported their mortgage servicer misrepresenting these fees as being unavoidable, when they were actually fees for optional services. In many cases, consumers have reported being charged a processing fee for a service they didn’t actually need, such as expedited posting of their payment.

Additionally, most mortgages include clauses prohibiting these fees. Lenders and servicers who charge these fees may be violating their own agreements, in addition to financial laws. If you have been charged pay-by-phone fees for making a mortgage payment online or over the phone and these fees are not detailed in your mortgage agreement, you may be eligible to speak with an attorney about your legal options.

PennyMac Mortgage Lawsuit

PennyMac is a mortgage servicer that services approximately $368 billion in mortgage loans for almost 2 million homeowners. According to plaintiffs Kendra and Andrew, the servicer may be violating the Rosenthal Fair Debt Collection Practices Act, as well as the Unfair Competition Law, in addition to the terms of their mortgage agreements by charging mortgage holders fees to pay their mortgage.

While PennyMac and other mortgage lenders are generally compensated through the interest that mortgage holders pay on top of their principal loan amount, some of these lenders may also be turning a profit off of deceptive mortgage payment fees.

According to them, PennyMac charges a fee of up to $15 for each payment made over the phone through a customer service representative. Additionally, Kendra and Andrew claim that the lender charges up to $5 for each payment made online, and up to $6.75 for each payment made using a debit card.

Although PennyMac’s mortgage agreements allow the servicer to charge borrowers for the actual costs of processing these payments, financial regulations prohibit the lender from inflating these fees. However, Kendra and Andrew claim that is exactly what PennyMac is doing, as the actual cost of processing payments made over the phone or online is much lower. They claim that this actual cost may be around $0.50 per transaction.

However, if PennyMac charges mortgage owners $15 per month for each transaction made over the phone, the servicer may be collecting almost $200 each year in mortgage payment fees on a single loan.

If you have been charged prohibited mortgage payment fees by your mortgage servicer when paying your mortgage over the phone or online, you may be eligible to speak to an experienced attorney about your legal options. Victims of improper mortgage payment fees who pursue litigation may be able to recover reimbursement for these fees in addition to further compensation.

Kendra and Andrew’s Mortgage Payment by Phone Lawsuit is Case 5:20-cv-01052, filed in the U.S. District Court for the Central District of California.

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.